We are all currently facing something many of us have never seen before. We are faced with something we have not prepared for and are worried about the world, the economy and of course, our finances.
This is the time to get in the right headspace when it comes to your finances. You can’t bury your head in the sand and hope that things will work out. This is going to take planning, budgeting and discipline. Now more than ever those budgets are going to be essential for keeping you on track and helping you out. It will show you where you need to make cuts and where there may be extra money.
The first thing to do is to be honest about what is going on. It is scary and it can be easy to hide away and try to ignore what’s going on. Although this situation is totally out of our control, taking control of your money is something you can do. And will leave you feeling empowered in a powerless time. If you have lost or are facing the possibility of lost income, this is the time to sit down and really go over your finances.
Next, make a budget. Write down all of your expenses. What are some things you can cut out or cut back on? Be realistic on this part. There are many things we have in our life that are luxuries. With the tough times ahead you may need to give things up for a while that you wouldn’t have thought of before (cable, eating out etc.). Remember, this is not forever. It’s temporary to protect yourself and your finances. You will really need to prioritize your needs over wants.
In times of uncertainty it can cause fear and panic which may lead to less than optimal choices such as retail therapy and overspending and unnecessary stocking piling (which adds up financially).
Take a look at what money you have coming in. Is there a way to bring in some extra income? If you have money coming in from a tax refund, add it to savings. If you are spending less money due to social distancing and staying home, put it into savings.
Also please remember there is assistance out there during this time, do some research or reach out for help if you aren’t sure what is available for you. There is the option to defer some loan payments as well a good tip is that if you are paying extra on your credit card debt to stop and just make the minimum payments for the time being. Use that extra money to pay bills if needed or put it aside in case things change in your current situation.
It’s important to make smart and strategic decisions in these uncertain times. Even if you are not facing financial difficulties at this time, it’s important to air on the side of caution and put extra money away, watch your spending and cut back unnecessary spending. We have no idea how long this will last and it’s essential to be prepared the best you can be.
If you can get yourself in the right mindset about money during this difficult time, you will be able to make smarter decisions with your finances and ultimately be in a better position.
As always, if you are feeling overwhelmed about your finances or you aren’t sure where to start, reach out I would be happy to help you.
Remember…take a deep breath and remind yourself that you will be okay. You may have to make changes but with the correct planning you can overcome anything that is thrown your way!