The COVID-19 crisis has caused great turbulence in our lives not only in our work but also in terms of health. Companies had to temporarily shut down to support efforts to contain the COVID-19 pandemic, and some companies even stopped operations due to huge losses in the community during the quarantine period.
For those who are struggling to survive on their day to day expenses with average salary, the huge loss of income has caused huge financial pressure. It is important that you check your spending and find out where you can focus on preserving or at least keeping your finances in order during this pandemic. I have listed some money-saving tips that can help you overcome this crisis.
Assess changes in your expenses
The pandemic has changed your work and lifestyle significantly, which is sure to have an impact on your finances. List and evaluate all the additional changes that you have to spend during Covid 19 like face masks, vitamins, work from home expenditures etc. In this way you will see the whole picture of your expenditures that you will need to budget and will not miss any.
Set a budget for each expense
Maybe you heard the 50/20/30 rule. As a rule of thumb, after-tax income is split and used for expenses: 50% for needs, 30% for wants and 20% for savings. This is a good guide to budget when needs are only equal or less than 50% of your salary.
However, for those who needs or expenses are greater than 50% monthly this doesn’t apply. For this scenario, you must prioritize your payment to monthly bills especially that have interest like mortgage, credit card bills. Followed with payment to utilities like electricity, water, internet provider, phone bills or monthly rent. Then your necessities like food, water, toiletries, transportation and covid 19 expenses. You may want to check out this planning calculator that can help you calculate expenses you have.
Never forget to Save and build your emergency fund – with what is remaining with your budget after expenses, put it into savings and emergency fund. Emergency fund is a separate savings account used for unexpected cash outflows under uncertain factors (such as sudden loss of income, illness, accidents or unforeseen expenditures). It must be easily accessible in times of need.
On the other hand, a savings fund is an account that you use to save money for a specific purpose. The account can be short-term, such as saving enough money to cover a down payment for a house or buying a new car. It is long-term, such as retirement or university education for your child. You may have a savings fund that can be used to pay for unexpected expenses, such as: B. Repairing a new car or refrigerator after a breakdown. According to your living conditions, how much savings you need.
Think of ways to increase your cash flow
In addition to cutting costs and figuring out how to strategically save more money, it is also important to find ways to improve your cash flow. Reliance on a single source of income puts your financial stability at risk, especially when you are in crisis. In the Philippines, according to PSA, “Unemployment rate fell to 7.1 percent in March 2021. This is the lowest reported rate covering the period of the Corona virus disease 2019 (COVID-19) pandemic since April 2020. The number of unemployed Filipinos 15 years and over in March 2021 was estimated at 3.44 million, a reduction of about 747 thousand unemployed persons from February 2021.” (source: psa.gov.ph). This statistics simply highlights the uncertainty of your current employment no matter how established your company may be. It’s important to think of ways to diversify your source of income. You can carry out a side business, or invest in crypto or stock market, monetize your skills, sell your unused things.
At first try, you may think budgeting with the tips I shared is hard. But when you commit in planning and proper execution this will be an easy peasy. Commitment is key to everything, especially when it comes to your finances.
great tips! we try to be more mindful about our finances and increase the emergency fund
Thanks for your tips, I’m always on a tight budget so this is absolutely helpful.
Very helpful…. hard to believe we’re still dealing with pandemic repercussions.
We are lucky that we didn’t suffer from less income during Corona
What wonderful tips to know how to budget during a tough time like this pandemic! I hope people take these tips and use them!
I don’t know if I can ever do clean living. It looks like a lot to get used to.
I agree with you that it’s about time we think of ways to increase our cash flow. Personally, I took more side gigs and did affiliate market for extra money. 🙂
This pandemic has really changed many people’s lives, mine as well. And yes, finding ways to increase your cashflow is always a good idea. When my clinic had to close 3 months, at the start of the pandemic, I was grateful for my freelance writing gig because it kept me busy.
I believe there’s always something more that one can do, to earn more, be more, and make good use of their time.
I was hoping we would be moving out of this now but unfortunately we will be here a while longer in the UK! A good read 🙂
Great tips here I think we all need to look at our cash flows and budgets from time to time. There is always room to increase cash flow
Increasing cash flow wasn’t something I was able to do. I did try to budget more and was very careful what I spent on food.
These are great tips especially assess any changes as what we spend our money on has changed so much since the pandemic began I think!
Budgeting is so important no matter when, but especially during these times. These are such great tips!
These are some great tips – I think our income and outgoings have all changed over the pandemic and we need to switch up our budgets.
These are great tips. The pandemic has seen plenty of money worries and so budgeting is of even more importance than normal.
I had never heard of the 50/20/30 rule – but with such easy to follow numbers, I bet it will be really useful in spending! I tend to just spend money whenever I have it.