The COVID-19 pandemic has forced many of us into financial situations that we could never have predicted. Countrywide shelter-in-place orders have left many without work, and businesses without customers. Now more than ever, it’s important to think about the way we spend or save every dollar we make. In some cases, the quarantine orders have given us an opportunity to shift how we are spending money while staying at home.
Below are our favorite tips on swapping what you spend your money on during the pandemic.
Make a Pandemic Budget
We always suggest regularly updating your budget, but especially when you’re hit by an unexpected financial or life change, such as the pandemic. Since your income may be different, now is the perfect time to go through your budget and see where you can swap or remove costs due to shelter-in-place orders. Figure out as close as possible what your income is, and if there’s any unnecessary costs that you can cut or freeze during this time. Expenses to consider cutting from your budget completely (albeit temporarily), include:
- Monthly subscriptions
- Recreational membership fees, such as gym memberships and kid’s activities
- Extraneous entertainment costs that you would normally spend at the movie theaters, bars, concerts, or amusement parks
- Gas and public transportation costs
- Any bills that can be put on forbearance or deferred due to the pandemic such as consumer credit or student loans (make sure to check with your financial institution to see what options are available to you)
Many companies are already offering membership freezes or insurance rebates due to the pandemic. If there’s any services you can’t access due to the quarantine, make sure you aren’t spending money on it.
Learn to DIY
The best way to save money is to stop spending it. With extra time on your hands, you may be able to take over costs for services that you otherwise don’t know how to or have the time to do. Learning to cook will save you hundreds of dollars every month on higher delivery fees for eating out. Rather than spending $40 to $50 a meal for a family of four, you can reduce that to under $20 by putting that apron on. Some other ways to save by doing the work yourself include:
- Auto maintenance
- Simple home maintenance
- Pet grooming
Who knows, you may learn a new skill or find a new hobby!
Make Smart Spending Swaps
Now that you have cut costs, you need to decide where to put the money you have saved. If you’re still having trouble making your expenses, any extra money should go to housing, food, and utility costs first. However, if you feel like you can spare extra each month here are some financially smart places to put your money:
- Traditional savings account
- An emergency savings account
- Auto maintenance
- Paying off debt
- More stable investments (talk to a financial advisor)
Other smart swaps you can make include:
- Spending more on fresh food than eating out
- Using streaming video services rather than all-inclusive cable subscriptions
- Buy (or rent) tools and equipment to help you complete tasks around the house
- Investing in your business or vocational classes to add to your resume
By making smart choices, the pandemic doesn’t have to be the financial pitfall it may appear to be.
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