Crystal Hicks is an accountant with well over a decade of experience in tax, finance, audit and accounting in New York and Florida. Each week in Money Talks, she’ll share her advice to help individuals to navigate their financial challenges!
Budgeting can be a challenge even in calm and predictable circumstances. Now we are all forced to budget during a crisis. Is it possible? Not only is it possible, it’s imperative. But how? It’s important to take inventory of your circumstances, resources, and expenses. This is not a one size fits all situation, but here are some questions to consider.
Has your income changed since the pandemic began? For example, are you still receiving a full salary, reduced salary or no salary? Are you in a position to take on additional work?
What resources are immediately available? For example, savings, retirement, lines of credit, etc.
What are your fixed and variable expenses? This one we will discuss in a bit more detail.
Bills. We all have them, but what do we do about them during times of crisis? The first instinct may be to avoid bills at all costs. On the contrary, now is the time to get closer to your bills than ever before. Stay in control or get in control. The bright side to this crisis is that the world is in it together. You are not alone. Everyone understands the hardship we are all going through and many are ready to help. Try the following…
First, write out all of your monthly bills and expenses.
Second, categorize them in order of importance. Right now food, shelter, and safety are among the top on the list. During this time you can also decide if there is any item you haven’t used in a while and would like to cancel (even if it’s just temporary).
Third, determine the amount you are able to pay for each bill giving priority to the most important items.
Fourth, visit the website of each company on your list. Many have already posted messages regarding COVID-19 on their website. You may readily find an easy payment extension option on there that you can complete online.
Fifth, call all of the companies that did not have payment arrangements online. Companies value your communication and are ready to help during this time. Explain your circumstances and work out an arrangement.
If you need additional assistance here are a few resources:
Track your expenses. Stay in the know. If your circumstances change again you will be in a position to be proactive! Tracking expenses can be done in a variety of ways. Simple pen and paper work well and so do digital apps and softwares.
But what about the quarantine sales! Oh how we love a good sale! Is there a way to enjoy a little luxury during a crisis? Of course! Quarantine is the best time for self care. There is nothing wrong with purchasing a few items on sale especially if it helps businesses that are suffering due to the current pandemic. This is also a perfect time try items you normally may not have purchased due to the deep discounts and extra time for a project or two. The key is balance. If your budget is already complete then you’re ready to go.
Budgeting doesn’t have to be overwhelming or restricting. Rather a just a clear path to our future. A way to help us set goals, give us the confidence to move forward or the wisdom to wait a bit. It’s something we should do even in calm and predictable circumstances and something we can ace even during a crisis. You got this!
Until next time,
Crystal
A note from the editor: If you are experiencing financial hardship due to illness or a disability, this link is an additional resource that discusses the importance of maintaining financial health while outlining how to manage, protect, and consider each available resource in order to mitigate damage.
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