Source:daveramsey.com

How to Manage Your Money When Going through a Crisis

The coronavirus pandemic is far from over in the U.S., but already, it has left millions struggling as they lost their jobs due to repeated lockdowns. When times are rough, it is difficult to think straight and to add to our worries by trying to change our spending habits, on top of everything. But it’s important to adapt so you can survive through the crisis, so here are financial movements you should do or shouldn’t.

Entertainment in the COVID-19 Days

Source:scotsman.com

Who would have thought entertainment could be so important in our lives? Of course, we all like to go out, watch a movie, catch a play or head to a restaurant and go dancing afterwards. But if you were told that you weren’t going out on a given night, you wouldn’t have felt like you were missing out. However, the lockdown has created something new inside each of us, which has become as crucial to our survival as much as the money coming in: Being entertained.

When you can go outside your house, you rapidly lose track of what life is. Without working hours to be kept, the days rapidly mix one within the other. Entertainment becomes a way to either forget the confinement and refresh your head or for couples and family, a moment to share which brings normality to an uneasy situation. That is why Netflix was probably the most important company during the crisis, with millions of viewers around the world, evading to other worlds.

But you also need your time alone with entertainment and nothing is as helpful as music to soothe your soul. That is why Tidal, a music streaming app, was one of the most used during the lockdown as well. With over 60 million tracks and 250,000 videos, it provided a way out to be enjoyed alone or even with the other members of the family for an evening of dancing. Thanks to couponbox.com, you can obtain a reduction on the cost of the membership at Tidal but also on many different items like restaurants, a night at the hotel and clothes. That way, when you feel the urgent need to order out or do a little shopping, you can still save some money while doing so. Which brings us back to: How can you save money during these difficult times?

Defining what is necessary and what isn’t

Source:ft.com

This is probably the most difficult question you will face during this crisis. Why? Because needs can differ greatly from one person to another. That is, of course, until you need to reduce your spending to the bear minimum. Let’s hope this whole situation will resolve itself before any of us gets to that point.

However, there is no doubt that some habits will have to be changed for everyone facing difficult times on the horizon, after having been laid off temporarily or permanently for others. The problem is that we don’t know when companies will start hiring again, so it is better to save as much as we can in the meantime.

When defining what is necessary for you, make a list of all the extras you pay during a week (don’t write down monthly bills like electricity, loan or rent and other utility bill. Gas for the car, which would normally be one of the necessary spendings, may not be right now, if you don’t have to go to work. Once you have made the list, which should include things like cinema, restaurants, Netflix, golf, a day at the spa, etc., then you will have to start looking into what you are ok to live without.

Reduce Costs, Including Bills Whenever Possible

Source:workinmypajamas.com

There are things you should permit yourself to do in crisis which you should never do otherwise. One of them is lower your payment on your credit card. It is essential for a healthy lifestyle to be able to pay your credit card balance in full every month. If you don’t, that clearly means you are spending too much and there will come a time where you won’t be able to get out of this debt. But in a period of crisis, that is one of the bills you can cut by simply paying the minimum amount. However, be aware that you are doing so and that this situation is only temporary, or else you will find yourself in trouble. Then, go through your budget and try to find other bills on which you can temporarily pay less or simply stop for the duration of the crisis.

Reduce Your Savings Input

The best-balanced families usually have an amount of money they consider as savings for each pay check that comes in. That helps you build an emergency fund for times… just like the ones you are currently living. Don’t try to be mightier than you can be about savings. Of course you won’t be able to add to your savings (since you won’t be receiving pay checks anymore) but don’t stop yourself from using that money, because you believe it is not meant to be spent. It is exactly what it is meant to do: protect you in times of difficulties. Of course, manage it wisely so that you don’t find yourself spending it all. The fact that you have it doesn’t mean that you can continue your normal life as if you were employed.

Lower Your Pride and Get help from your Community When it Is Offered

Source:business2community.com

Community help is not always for other people then you. Hardship can happen to anyone, and you should not let your pride get in the way of accepting the help which is so graciously offered. Not all communities have this chance, so if you are part of one that provides it, accept it. To learn about the help which exists around you, call 2-1-1 or go to 211.org. The services they offer can be quite varied, from food banks, to meals for students and seniors and even psychological health for those who are suffering mentally from the pressure they are being put through.

There is also some relief that is being brought by the Federal government such as the postponement of federal student loan payments as well as coronavirus-specific unemployment programs. If you don’t take the time to learn about them, you may be spending money you shouldn’t have to or are not receiving some to which you are entitled.

Find a high savings rate

Now, is the perfect time for you to be proactive in looking for a better saving rate. It is easy to open a high-yield saving account today, in an online bank, which can get you more than the 0.06% average currently being given out (on average). Some even go above 1%. This is the simplest way you will find to earn more money from the one you already have and do so in a matter of minutes.

Conclusion

No matter what you do, keep a tab on how much money you are taking out of your saving accounts. The last thing you want is to find yourself having to rebuild it all once the crisis is gone. Yes, it is there to protect you and to enable you to survive such a crisis, but the more remains on your bank account and the easiest it will be to rebuild it when you go back to work.


Ricardo is a freelance writer specialized in politics. He is with foreignpolicyi.org from the beginning and helps it grow. Email: richardorland4[at]gmai.com

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