ue to coronavirus, many are losing jobs, online shopping ads send you into a frenzy, and on top of all that, welcome to the recession. Maybe you feel that you were pinching pennies as it is, but the pandemic hit and all your anxieties come true. Firstly, do not worry about what you can’t control. Worrying won’t help anyone. Secondly, make a budget and stick to it. This will allow you to live within your means during one of the hardest times to live economically in history. We offer some help and solutions to these anxieties such as the following:
- How to Make a Budget and Stick to It
- Keep Your Credit Cards In Check
- COVID-Specific Monetary Traps to Beware of
- Encouragement That You and Your Pockets Will Make it Through This
Busting Your Budget Blues
Learning to Create and Abide By Your Budget
We know, we know, this seems like not a fun part of your life. However, it institutes a lifestyle change and creates agency that we are sure you will enjoy. If you create a Zero-Based budget, which accounts for all the earnings and spendings, you will be able to accurately monitor your spending. You can either do this analog or digital (we suggest digital--maybe an excel spreadsheet or a couple). Once you put your earnings in, assign a specific purpose to all dollars and cents. For instance, if you spend about $200 dollars on groceries for the month try to stick to that amount (use coupons, go to the cheaper grocery store if necessary). In this type of budgeting, it covers the needed allocation of funds for repaying loans and necessities.
Now, the question is: How do you stick to the budget you created? Allocate funds for recreational uses (getting your hair done, decorations, extra sweet treats, going on the occasional shoe spending splurge). You know who you are, if you go down that road and do not return. To stop this from happening, budget for these special instances and stay disciplined. Also, put extra money that you receive in either savings or debt repayment, you will thank us later. The great thing about this budget is that you create it each month so that you can revise it and get better at this practice. Some even divide their eating out and other categories in cash envelopes to stick to this divvying up system. All in all, you got this!
Here are some more hacks to stick to your budget:
- Do not go to the grocery store hungry
- Go to places that offer products with less price even if it may be a farther drive
- Keep receipts
- Ask yourself: Do you really need this? Are you going to use this frequently or will it have a shelf life for far too long?
- Thrift more
- Remember your financial goals and let that motivate you
- Try not to watch commercials
- Do not pay for budgeting software
- Do not waste your purchases, so reuse your jar for jam as a cup or storage jar
- Eat in more often and cook
- Participate in free activities (i.e. go to the park, free admission to the museum, paint your own nails once in a while)
- Monitor your utilities and make sure to use less water in the shower, turn off the lights if you are not using it
- Research and sleep on it before you purchase
- Put 10% of your income in savings
- Go to the Library instead of buying books or buy used books
Boosting Your Credit and Keeping Your Balances Low
Credit cards are really for boosting your credit, nothing more. Do not purchase above your means and if you already have created your own payment plan in your budget. Resist the urge to put your credit card for online purchases. If you can, wait for in-store purchases. It will make sure that the product is what you are looking for because let’s face it, are you really shipping your returns back if those shoes don’t fit?
Use your credit card specifically to purchase things that you know you got the money for, but just to use your credit card. Make sure that the payment deadline is in your calendar with all the alarms. But the best practice is to pay it within 48 hours of purchase. Play the game of credit cards but don’t let it play you.
The Pandemic Can’t Have My Money
Avoiding Unnecessary COVID Spending
Say it with us, “Pandemic, you can’t have my checkbook, my credit card, my cash, or my investments.” There is some positive reinforcement because when you speak it into existence it will happen. Northwest Mutual outlines many helpful tips on how to avoid COVID-related traps for spending. For instance, beware of the overpacked cart (make sure that you have no duplicates and only put in what you need). Additionally, use this time to get rid of the tv, magazine, protein powder, gym subscriptions that you are not using. These can really get your money down because often it’s taken directly from your checking account and you barely notice it. Avoid delivery fees is another huge way to say your money. Every little bit counts and as a good steward you will be aware of everything that goes and comes from your account. Lastly, avoid scams by buying from reputable websites, never provide your social security number online, make sure that the GoFundMes and your donations are actually going to the right causes.
And a little hint for some extra money: budget for investing in companies that are thriving or will thrive because of and during COVID. Some stocks are very valuable at this time, like toilet paper, medical supplies, online shopping centers, and take out services. We want you to do more than survive, but we want you to walk in prosperity in the area of your finances.
Don’t Knock the Hustle
Using Your Creativity and Ingenuity to Your Advantage
Most times people have a hustle or a side thing they do to make extra money. If you do not already have one of those make one. Find your hustle (how can you make money in addition to your real job, such as writing reviews, cooking meals, cutting grass for others) and designate that as possible spending money. For instance, take lessons from The Grand Hustle, a TV show that aired in 2018. Its process was to find the rapper, T.I, an assistant to run his business empire. Week to week he would give the participants many challenges. The first week the participants were given with objects of little value to become traded for objects of bigger value. Lessons to take from this show that relate to financial literacy and entrepreneurship: do not burn bridges, be creative with making your money and assets work for you, invest into your time and money (i.e. think about how many shifts you worked to purchase that luxury item), and lean into the wisdom of more experienced and successful people.
Protect Your Pockets at All Costs
Stay Savvy and Confident In Your Budget
Make due is just step one, but make it work allows you financial stability, flexibility, and allows you to plan but be able to splurge occasionally. Approach financial literacy like any other subject--study it, keep it simple, and press toward the mark (whatever your financial mark is). Maybe your mark is living debt free, maybe it is paying off those student loans, or maybe you just are sick of seeing that long list of purchases you will barely remember and they will sit in your closet for years to come. You are better than this and as an adult, your responsibility is to access financial stewardship, so no more excuses. We are rolling up our sleeves with you. Let’s get to work making our money work for us.
Hero image courtesy of Washington Department of Financial Institutions.