The COVID-19 Pandemic has presented countless challenges for our country. Whether you’re a seasoned professional, an empty nester, a fresh college graduate, or anywhere in between; many of us have had no choice but to change the way we think about budgeting.
Most of us believed the COVID-19 Pandemic would be short-lived – lock down for a few weeks and we’ll come out of it. Unfortunately, that was not the case and we’re now at the one-year anniversary of lockdowns, school closures, and all the challenges that came along the way. One of the most persistent issues during the last year is the challenge of managing a household budget.
If there’s one piece of advice we want to make sure you understand, it is that it is time to take control. Below are some tips to help you budget as we continue to deal with the ongoing pandemic.
- Categorize your personal/household budget to assist with portions of your expenses that may persist much longer than expected in a reduced capacity.
- Separate into 3 categories: needs, negotiables and wants.
- Needs: cannot live without (rent, mortgage, electric).
- Negotiables: can live with a change for a year (cable, dry-cleaning, used vs. new kid sports equipment).
- Wants: can live without (travel, gifts, specialty coffee drinks).
- Once you have monthly values for each category, you can eliminate or significantly reduce expenses that are not needed for months at a time with a quick list to check off (great to have for loss of a job or illness affected income – not an anomaly in pandemic).
- If you’re able, this will help identify areas for opportunity for additional saving (emergency fund to build up) or even contributions to maintain or begin increasing for future growth (retirement funds or investment accounts).
This strategy allows for the ability to have a sense of control and stability in our financial house while we continue to live in an uncertain world. We hope these tips help as we navigate the pandemic. As always, our financial advisors are available to discuss budgeting and your other financial needs.