Millions of Americans are out of work, oil prices are at record lows, and we’re only at the beginning of the coronavirus crisis. While you’re working on protecting your physical health in the face of this pandemic, there’s never been a better time to work on your financial health, either. You never know what might happen with the economy, or with your job, in the coming months, so it’s best to be prepared.
Fortunately, with lock downs and stay-at-home orders in many parts of the country, you’ll at least save money on going out. And there are plenty of other ways you can start being better with money, and that can at least give you a sense of control over your finances when so many other things feel chaotic and scary.
Go On a Spending Fast
As previously mentioned, you’re most likely already saving money on going out to eat, going to bars and shows, and going shopping for fun. But while the allure of online shopping is tempting, now is no time to go crazy with the Amazon Prime purchases. If you’ve already been doing a lot of online shopping, try reining yourself in with a spending fast.
A spending fast is when you stop spending money on unnecessary purchases for a period of time, usually three weeks or a month. Don’t worry, you can still buy essentials like food, hygiene products, gas or other transportation costs, pet supplies, and medication. But the point of the spending fast is to think long and hard about whether you really need a prospective purchase, or whether you merely want it. By cutting out all your extraneous spending for a month, you can save a surprising amount of money, and you might just find yourself spending less after your fast is over.
Put the Credit Cards Away
Racking up credit card debt is never a good idea, but it’s even less so in uncertain economic times. If you’re already struggling financially and using credit cards as a way to make ends meet every month, you’re going to wind up in a lot of debt pretty quickly, if you haven’t already.
To begin taking control of your finances, put the credit cards away. Set a budget, switch to using debit cards, and start a savings account if you’re still working. If you’re unemployed or furloughed, resist the temptation to use credit cards to pay your expenses. Sell things on eBay, borrow money from family, or and apply for unemployment first.
Make a Financial Plan
A financial plan is different from a budget. A budget helps you control your spending from month to month, but a financial plan is more of an overarching strategy for your whole life. Rather than a short-term plan for the weeks ahead, it’s a long-term plan for the next decade or three. It can help you prioritize your financial goals, like buying a house, saving for retirement, or putting children through college. By emphasizing different goals at different times in your life, your financial plan can help you meet all of your goals.
Find a Way to Make More Money
It may be easier said than done, but one way to be better at money management is to have more money to manage — especially if you find that you’re always struggling to make ends meet from one month to the next. The middle of a pandemic might not be the best time to find a second job, but there are plenty of things you can do from home — sell your arts and crafts online, monetize your old toys, stream video games, teach English online, pick up some freelance writing work, and more.
Make a Budget You Can Stick To
If you’re struggling with your finances, sticking to a budget can help you get back on track. But sticking to that budget is key — and while a good money management software solution can help you keep track of your spending, software won’t do you much good if you can’t actually stick to the budget.
As with a diet, a budget that is too austere won’t work — you’ll just get frustrated and rebel. You need a budget that accounts for your expenses and allows for savings, but you also need some discretionary money to spend on things that make you happy. And if you fail to keep your budget one month, don’t give up — make adjustments and try again the next month. You could cut down spending in one area to allow more spending in another area, look for a second job to pick up more money, or reevaluate your needs and wants to better live within your means.
Better money management is always important, but it’s more crucial now than ever before. Take steps to get your finances in order now — it could serve you well in the near future.
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