With every new year comes a list of new resolutions, new goals, and plans for the future days. People may decide to achieve a few unfinished targets in every new year such as joining a gym or learning to cook, doing yoga or meditation, and lots of other productive work. But most people make resolutions about financial matters or set up new finance-oriented goals.
Setting and sticking to a solid budget is one of the most desired financial resolutions or goal we think of every year.
This year is also not an exceptional one. But due to the outbreak of coronavirus, we may have to modify the priority levels of our budgeting in 2020. This will help us to overcome this crisis, as well as help, achieve our financial success.
The holidays are over now, so do the urge of overspending on luxuries. Now we are getting through the most difficult time since the last decade. Now it is time to set up the most sustainable budget plan we have ever created. Let’s check out how we are going to do that and what should come into our priority list.
Set up a budget plan for 2020 to fight against the coronavirus pandemic
a. Manage your savings first
When you are going to prepare a budget plan for 2020, you need to consider savings as your priority one. It is one of the life goals that you might fulfill later, after paying all the expenses in the month-end. But now the situation is different. You need to save first, and then make payments to your other priorities.
Due to the coronavirus outbreak, different banks and lenders have decided to reduce their interest rates.
The department of education even implemented an act to charge 0% interest rate on their federal student loans. It is an administrative forbearance provided under the CARES Act. So, you have the option to save as much as possible. You may need to adjust your expenses a bit more than usual.
Due to the pandemic, most of the countries are maintaining lockdown and people are strictly following the social distancing. But, we need supplies to live, we need food, water, and medicines to maintain our normal life.
To buy such things, you need some serious cash in your hand. So, if you are still working from your home, and getting your paycheck, make sure you first put a majority of your money into savings. You might face any unexpected need for money at any time, so it is wise to make your savings strong. To support your longer-term needs, it is necessary.
b. Stock supplies smartly
As I said earlier, you need to make provision in your budget so that you may stock up supplies for emergencies.
Due to the coronavirus outbreak, commodity-supply companies are reducing their services. So, you need to visit local stores to buy the necessary items. Here are some effective ways to buy items within your budget.
- Medicines – You should consider picking up the medicines that are essential for you such as meds for high blood pressure, diabetes, thyroid, any respiratory drugs, inhaler, anticonvulsant meds, and many more. Make sure you get at least 1 months’ stock ready for you. You may need to buy a few generic meds such as cold medicine, cough drops, paracetamol, pain killers, and antiseptic lotion. You may buy such medicines in a bulk to get discounts. Be sure to contact your insurance provider and make sure they’ll cover the medical costs.
- Groceries – To reduce your grocery bills, you need to buy affordable, easy to cook foods that can be prepared without any hassle. If you’re stuck at home for longer, you need to stock rice, pasta, noodles, cereals, and beans. You may buy fruits that can be stored for longer. You may try the bread and shredded cheese for daily use. You should buy milk in bulk, and avoid buying packaged fruit juices.
- Stock personal hygiene items – Make sure you buy items to maintain personal hygiene for you and your family. During the lockdown, we should take care of our personal hygiene so that we can avoid being ill. But do not try expensive, branded items at all. Regular, cheap but good quality products will fulfill your needs and save money from your budget. Handwash, hand sanitizers, and toilet papers are most essential. Do not forget to buy detergent to wash your clothes at home.
c. Make space for debt payments
Most of the lenders may reduce interest rates, now it would be a good time to manage your debts.
As per the US DEPARTMENT OF EDUCATION, the CARES Act is implemented on federal student loans. As per this act, the borrower does not have to pay interest on their qualified federal student loans for 6 months, till 30th Sept 2020. So, you have a decent amount saved from your monthly budget. Though you have relaxation in paying the federal student loan debt for 6 months, you should pay that debt timely.
Do not use credit cards as much as possible. Instead, you may use cash. If you have high-interest credit card debts, you may check if you qualify for a balance transfer card with a lower interest rate. With a 0% apr balance transfer card, you may transfer your balances from higher-interest credit cards easily. This way you may pay off the debt within the introductory period, with lots of savings and start living a debt-free life. Similarly, you should also handle your tax payments and pay tax debt timely to avoid any penalties.
If you have a mortgage loan, it may be the best time to refinance it at a lower rate. This way you may reduce your monthly payments, and save money on the monthly budget by spending less in the long term. When the current pandemic crisis ends and everything gets back to normal, you’ll find that you are saving a lot from your monthly debt payments by implementing these options.
One more thing! Do not opt for a payday loan at any cost. Payday loans have a high-interest rate compared to any loan, so it will make a hole in your wallet and destroy your monthly budget.
d. Save on existing services
To help the common people, several companies worldwide are currently offering reduced price or free services during the outbreak.
Opting for these services may help you to save and control your budget. These services may include:
- If you like music and want to share your favorite tunes with your loved ones, it can be possible while maintaining social distancing. You have the option to create a virtual music party by using the app Spotify and share the playlist with your friends and family.
- Subscribe Netflix and enjoy special shows, movies, and lots of other videos with friends from afar.
- Spectrum in the U.S. is offering free internet access for subscribers who qualify, and other providers also providing cheap affordable deals.
- You may qualify for a discount on utility bills, contact your provider asap.
- Phone companies are also offering low-value plans that offer lower services.
- Check on your recurring subscriptions, and disconnect those which are not in use.
- Gym memberships are not going to pay during the outbreak of coronavirus. So, you may cancel your membership for a while and start working out at home.
Your spending may fluctuate every month due to this current crisis. In some months your credit card bills will be a little lower than usual, then some months you might face a big utility bill. You may even get hit with an unexpected expense any month.
So, when you carry a lighter financial load in a particular month, and you have sufficient funds to manage any emergencies, try to spend wisely that month and use your surplus money towards debt payoff. This may help you to get out of debt faster and free up more space in your budget.
When you need to manage so many expenses in your life, your first financial move should be creating a budget. Setting money to different cost categories properly, tracking & analyzing each expense, and improving your budget is necessary to achieve financial freedom.
Above mentioned budgeting tips are specially dedicated to handling the current pandemic situation. Once we can get over this situation, we may modify our budget plan in any month considering the current financial situation.
Author Bio- Patricia Sanders is a financial content writer. She is a regular contributor to debtconsolidationcare.com . She has been praised for her effective financial tips that can be followed easily. Her passion for helping people who are stuck in financial problems has earned her recognition and honor in the industry. Besides writing, she loves to travel and read various books.
To get in touch with her (or if you have any questions regarding this article) email her at firstname.lastname@example.org.
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