With the job market on ice and many bars, restaurants, and movie theaters closed across the country, many people are finding that now is a great time to take the money they would spend at places such as these and save it instead. It’s not clear when the U.S. economy will recover from the coronavirus pandemic or when we will be able to go back to work safely, but until then, it may be best to tighten your pocketbook and save your money for a better day.
Many industries are suffering as the crisis lingers on, including the hospitality, travel, healthcare, and entertainment industries. If you’ve recently lost your job or know someone who has, this is the time to scale back your expenses. Or, if you are holding onto your job but nervous about the future of your finances, you can use this time to save up and build your emergency fund – just in case.
Follow these tips to stay afloat during the pandemic:
- Set a New Budget
The pandemic has upended spending trends across the country, and the same may be true of your household. Calculate a new budget based on recent economic changes, including your new monthly or weekly expenses and any changes in income. Look for ways to further limit spending during this uncertain time. For example, you could try buying off-brand products, reducing your utility consumption, or cutting out luxuries.
Groceries can be a major expense with everyone hanging out at home. Stock up on cheap basic ingredients like flour, sugar, yeast, and seasonings so you can cook meals from scratch instead of relying on prepared foods, take-out, and overly processed meals, which are expensive.
- Open a High-Interest Savings Account
Many of us have had to rearrange our personal lives and daily routines in the wake of the pandemic, so take a moment to assess your new lifestyle. Many of the things we used to enjoy are no longer an option. Start saving the money you used to spend on travel and drinks out with friends. A high-interest savings account will help you make the most of the money you earn.
Use your new budget to anticipate how much cash you’ll have on hand going forward. It’s best to plan for the worst, so try to put as much money away as possible in case you lose your job or your state needs to shut down again to slow the spread of the virus.
- Focus on the Essentials
Things look different when you’re viewing them through the lens of a global pandemic. Priorities can shift, including your spending priorities. Go back through your financial records to see where most of your money has gone in the past. Are you spending too much on rent, alcohol, or even landscaping equipment?
The coronavirus pandemic has taught us to value what’s most important, such as our physical and mental health, civil rights, and the wellbeing of our loved ones. If you’re spending too much money on things that don’t really matter in the long term, consider cutting them out of your life – at least until things return to something like normal.
Look for other ways to spice up your life during the pandemic, such as reading, exercise, volunteering, or a hobby. Choose something that doesn’t involve spending a lot of money on a regular basis.
- Take Advantage of Local and Government Programs
Americans are feeling the pinch as the pandemic rages on. Some countries have been able to get this deadly disease under control, but others still have a long way to go.
Millions of people have had to go on unemployment, and additional expanded benefits have been debated for months with no foreseeable solution.
If you are having trouble making ends meet, there’s no shame in asking for a little help or taking advantage of low-cost programs. If you lost your job or are making less money, you may qualify for Medicaid and other low-cost health programs.
Talk to your utility providers about reducing your bills. Many companies are offering discounts to customers to keep them connected during the pandemic. You can try lowering your HVAC, internet, electricity, and water usage while you’re at home.
The Federal Reserve has drastically lowered interest rates to keep the economy afloat. Consider taking advantage of low-interest loans or refinancing your mortgage to help free up some extra cash. Student loans are no longer collecting interest, so you can take a break from paying these off for a few months until you get your finances in order.
Keep these tips in mind to help your money go further during the pandemic. Money is sure to be tight in the foreseeable future, but saving a little money today will help you stay sane tomorrow.