Budget Vs Corona Virus: Who will win this battle?

We all have noticed the impact that the Corona Virus has made on the economy. Unfortunately, this had resulted in loss of hours or wages. Many people are thinking “How are we going make ends meet?”. I recently came across an article on Forbes.com that gives some tips on how to budget during the Corona Crisis. I’ll provide the link below.

https://www.forbes.com/sites/advisor/2020/04/10/4-ways-to-stretch-your-emergency-fund-during-the-coronavirus-crisis/#7363144037f3

The first step is to create a Crisis budget. The most essential expenses to budget are housing, utilities, food, and transportation. Thankfully, the rent or mortgage payments are normally the same dollar amount each month. Utilities can fluctuate, but if we’re conscientious on our water and electric usage, we can save some money. Although food is essential, be aware of what kind of food is purchased. It’s pretty easy to impulse buy some chips, desserts, or any other snacks. Transportation expenses could include a car payment, gas, oil, insurance, etc. One thing to look into is your auto insurance rates. You may be able to find a better policy with similar coverage for a lower price.

The next step is to reduce spending. This could include reducing or cutting non-essential expenses. This could include reducing the number of streaming services, cutting out some of the snack foods, or any other miscellaneous expenses. The article mentions reaching out to lenders or landlords to see if they will be flexible, but I would use this as an absolute last option. Pushing back obligations like rent/mortgage payments, car payment, or credit card payments could result in a larger sum owed later. I would recommend cutting back on other expenses before trying this option.

The third step is finding new income sources. Although some companies are cutting back their payroll expenses, other companies are hiring due to a higher demand due to the Corona Virus. Some companies may need additional help for deliveries. This could be drivers or warehouse workers. Some companies have also created a company fund to help employees that have been impacted by layoffs or furloughs. The stimulus check will provide some assistance. Many people have also applied for unemployment, but this may take a few weeks to process.

The last step mentioned in the article is to put some financial goals on hold. Some people have paused paying off debt until everything settles down. If you’re expecting your income to decrease in the near future, I would recommend on focusing on covering the essential items mentioned in the first step. If your income is stable, I would recommend building an emergency fund. Once the emergency fund is funded, you can continue with pursuing the goals.

Let me know if you have any specific questions regarding your finances, creating a budget, or how to make ends meet. You can send any questions to patton.financialcoaching@gmail.com.

You can also sign up for financial coaching sessions by either sending an email to patton.financialcoaching@gmail.com or go to pattonfinancialcoaching.com