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The coronavirus pandemic has had a tremendous impact on this nation’s economy. Millions of Americans are out of work, or they’ve seen their income drop substantially. While some states have started easing their lockdown measures, there really is no end in sight for the effects of the pandemic. In fact, some economists predict that it could take up to a decade for the economy to recover fully from the COVID-19 crisis. If you’ve been affected in one way or another by this crisis, or expect to be, now is the time to start adjusting your spending. Here are five ways to create a tight budget and save money during these tough times.
1. Develop a Budget
The first thing you should do when money is tight is to develop a budget to better account for your income and expenses. This can be a challenging first step for many; a 2019 survey found that over 30% of American households have no budget at all. If you’re one of them, taking the time to make a budget will give you a better understanding of your overall financial situation. Even if you already have a household budget, adjusting it after the extraordinary circumstances of the coronavirus pandemic will be a good exercise. You’ll be able to determine what activities and budget items are essential, and what you should or must cut to account for the new normal.
2. Make Some Cuts
Saving money on the budget you develop will likely require you to make some hard choices. You’ll almost certainly have to start cutting out expenses for things that you might enjoy but can no longer afford. Therefore, after you make your initial budget, take a hard look at all your expenses. Go line by line, and ask yourself if you really should be spending money on each item. For example, you can realize some savings by canceling your cable or eliminating some of your streaming services. You may be able to save additional money each month by cutting online and newspaper subscriptions. Reducing the number of times you dine out each month (which is easy to do during the coronavirus lockdown) is another way to save money each month. While it may be painful, eliminating some extraneous spending is one of the easiest ways to cope with a tight budget.
3. Be a Better Shopper
One of the easiest ways to make an impact with a tight budget is to shop more effectively. Whether you’re buying groceries, clothes, or other household items, if you take a more deliberate approach to purchasing goods, you can save serious money. Before you commit to buying any big-ticket items, you should definitely comparison shop, and ensure you get the best possible price. Shopping at thrift stores instead of department chains is another great way to save money and discover some great finds. Additionally, if you never took the time to use coupons or savings apps when shopping for groceries, start doing so now. Keeping an eye out for promotions at local stores, as well as at online giants such as Amazon, is another great way to spend less money each month but still get the things you need.
4. Get Rid of Debt
Another great way to save money on a tight budget is to reduce the amount of credit card and other debt you’re carrying. Tackling your debt will reduce the amount of money you lose each month to interest expenses and other fees. Additionally, reducing the payments you have to make on those debts each month will free up money that you can commit to more important budget items. If you don’t think that you can manage to reduce your debt levels on your own, consider reaching out to the team at National Debt Relief. The available debt consolidation programs may be a great fit for your financial situation and could help you begin reducing your debt levels.
5. Leverage Coronavirus Acts and Programs
Another way to make the most of a tight budget right now is to use many of the resources that have been voted into law or initiated by companies to limit the economic effects of the coronavirus pandemic. For instance, the recently passed Coronavirus Aid, Relief, and Economic Security (CARES) Act allows you to request mortgage forbearance, or delays in monthly payments, for two 180-day periods. Using this benefit could help you adjust your budget to deal with a coronavirus-induced job or income loss. Additionally, many banks and credit card companies are currently assisting their customers. Therefore, do your research and make some calls, and see if there are currently programs out there that can help you make the most of a tight budget.
If recent events have left you in a tough financial situation, don’t worry, you can still make the most of the money you have. Just follow these five tips, and you’ll be on your way to adapting to the new normal and living your best life on a tight budget.