Budgeting sucks. Even on a good day. But This is the time to save money. The current down economy situation could last a long time and you have to be ready.
Budgeting is challenging even on a good day. No one likes it and no one wants to do it. The problem is, now is the perfect time to save money. The economy is down and it’s important to be prepared. Sheltering in place means you aren’t paying for all of the things you used to spend money on. Take advantage of this time and save, save, save.
There’s no free lunch
Take a close look at your expenses during this pandemic. You might be surprised at how much money you are actually saving by not going out, not traveling, cooking instead of dining out. If you aren’t driving, you are saving on gas. If you aren’t going out on the weekends, you are saving money on clothes. While it can be tempting to spend those savings on other things, such as loungewear, new furniture and everything from Amazon, resist the urge. Give yourself some small treats, but opt instead to bank most of those savings.
Big vs. small expenses – where to start?
Better to tackle a few big expenses than several small ones to start making a big impact on your budget.
- Car – if you have 2 cars, you can sell or return 1, or reduce the insurance of the one you are not driving.
- Housing – you can try to renegotiate your mortgage and you rent, or maybe even consider moving to a less expensive area
- Utilities – these are a big fixed cost we each have any month. You would be impressed by how much you can save if you really start caring about how much you consume
- If you have any loans, you can probably renegotiate the interest you are paying.
The Latte Effect
If the big expenses are too much to tackle, you can make significant inroads on the smaller ones. It’s called the latte effect, you know these little things you consume every day? Analyze your recurring expenses, such as subscriptions. Do you really need multiple video streaming services? If you find yourself exercising more now that you are home (and we hope you are!), look for the many free classes online instead of subscribing to multiple programs. If you start a free trial, set an alert in your calendar to remind you to cancel before you start getting charged.