Improve Your Financial Health in Stressful Times
We know this is an unpleasant time for the TCA Financial community and the world at large. We are living in unprecedented and agitating times; our day by day schedules, exercises, connections, and funds have been influenced drastically by the novel coronavirus.
With so many stories of data on the most proficient methods to protect yourself and your health primarily, we wanted to cut through the commotion to share a few hints on how you can protect and improve your financial health.
Our three tips include taking a look at your pre-emergency spending, setting a limit on spending, and coming back to regularity during the recovery time frame from a place of solidarity.
Table of Contents
- 1) Take a look at your spending pre-emergency
- 2) Increase your savings during the emergency by following a budget
- 3) Coming back to commonality: post-emergency recovery
1) Take a look at your spending pre-emergency
With the widespread social distancing and quarantine requirements, many of our spending habits have changed drastically. To climate through this period, investigate and understand your spending before the emergency began to find ways to save going forward.
Look at your spending habits throughout the previous three months to understand:
Non-essential expenses: Look at the amount you were spending across extracurricular activities, entertainment, dining out, going out, shopping, travel, and transport. These are the areas you’re less likely to spend on during this emergency period.
Essential expenses: Understand what amount of money you spend on essentials such as groceries, rent or mortgage, school, utilities, and other necessary bills.
Considered together, this should provide you with a direction on where to start to save on areas that aren’t essentials and how to start budgeting areas of essential expenses.
2) Increase your savings during the emergency by following a budget
Setting a budget
The next few weeks or months will likely move many of your non-essential expenses from offline to online. Activities like eating out or trips to the movies might be replaced with ordering delivery food and renting movies online. The move from offline spending to online spending can quickly escalate without your keeping track of where your money is going.
Set a budget across non-essential expense categories. Decide precisely how much you’ll spend on delivery food or online purchases of movies. Apps like Mint and Wally can help you separate your expenses into categories making it easier to budget. Knowing precisely how much you want to spend in each category and sticking to it will keep you from stressing about your financial status and help you weather this emergency period in time with certainty.
Increasing your savings
Contingent upon your circumstances, this period could be an open door for you to build your savings. Because much of our spending is attached to get-togethers and social occasions, a decrease in these actives will likely free up more of your income. Take the money you would typically spend in those categories and keep it in a savings account. It’s difficult to know how long this coronavirus emergency will last, so it’s a solid plan to increase the amount of money you have in savings. You’ve heard it before: plan for the worst but hope for the best.
Managing the unexpected loss of income while the government instructs you to remain at home can be wounding. If you’re dealing with a loss of income, look at all upcoming payments to lenders, credit card companies, and other bills. Contact creditors as soon as possible. The more you remain in communication with them, the more likely they are to work with you during unstable times. With the government already advising creditors to be flexible, you may find that creditors are especially willing to work with you.
3) Coming back to commonality: post-emergency recovery
Fight the temptation to overspend
After the coronavirus emergency, you may have the impulse to overspend or to return to your pre-emergency spending habits. In any case, doing that will keep you from keeping to your savings goals. It’s important to remember that an emergency can happen at any time. When the crisis passes, it’s smart to re-survey which of your expenses are essential and which expenses aren’t. Nobody’s financial life is a guarantee, and it’s a decent general guideline that having 3-6 months of your spending in savings can help assure that you’re ready for a future emergency.
These stressful times will pass
This emergency isn’t the new normal. These are unusual times of emergency, but it continues to be vital that you keep calm and remind yourself that humanity has endured these crises previously, and we’ll endure once more. The TCA Financial family hopes that you and your family stay safe and healthy. Our hearts go out to everybody who has been affected.