COVID-19 has impacted everyone in some way whether it’s a displaced work environment, a cancelled event or just missing your favorite restaurant. Financial impacts from layoffs, furloughs, salary cuts or investment losses has caused a time of financial uncertainty. On the upside, we’re experiencing a time where we have more down time on our hands. Using this time to re-evaluate your budget could find you cost savings and help regain financial control.
Has your household income been impacted?
Sometimes we take for granted throwing an extra piece of clothing in the cart or package of our favorite cookies while running errands. As hard as it may be, try to resist the urge of picking up unnecessary items at this time and think about your needs versus wants. While those cookies are making your mouth water, think if you really need it or just want it. Use the reward system for yourself to resist unnecessary splurges and when your income returns to normal, treat yourself!
As you grocery shop, think about different ways to use food in your everyday routine meals. Stock up on foods that can be preserved and used in a variety of ways. Think, frozen meat, frozen vegetables, non-perishable and canned goods.
If you’ve seen a reduction in income due to the recent downturn, explore the resources available under the CARES Act.
Prioritize your debt
As you’re at home, chances are you’re not spending as much on dining out, entertainment and coffee runs. If you find additional room in your budget over the last month or two, move that extra cash to pay off essential debt.
Pay off credit card debt and other debts that have high interest. You may be surprised at just how much you are paying in interest each month if you are carrying a balance on your credit cards. Lifting that payment will leave extra cash in your pocket.
Don’t hold back on paying student loans – If you have student loans held by federal government agencies, interest has been waived as a result of the declared Coronavirus pandemic. This is great news as the entire payment amount will go toward your principal balance, meaning you will make more progress toward paying off your debt than you normally do.
Look at ways to cut costs
- Evaluate subscription services – Subscription services are easy to forget about when they come out of your bank accounts and you often don’t even see the charges. Take time to evaluate the services you are using and if they’re still relevant. $10 here and $15 there doesn’t seem like much but on a monthly basis they can add up quickly.
- Combine accounts with family or friends – Combining accounts and splitting the bill multiple ways can save for everyone involved. Popular services including Spotify offers a family plan and Amazon Prime offers benefits for family members and small businesses.
- Cut your cable bill – With the increase of on-demand and streaming services, more people are cutting the cord with their expensive cable plan. Think about how much you really sit down to watch TV or if you use all the channels you’re paying for. You might be able to get by for less cost with an antenna or services such as Hulu, Amazon Prime or YouTube TV.
- Evaluate your insurance policy – Schedule an annual review with your insurance agent and make sure your coverage is still relevant. You may even qualify for a new discount!
Watch out for scams
As Economic Impact Payments have started to be delivered, be alert for a surge in phishing scams which can lead to tax-related fraud and identity theft. The IRS will not call you and ask to verify or provide your financial information so you can get an economic impact payment or your refund faster. Be wary of suspicious activity asking for your bank information via phone, email, text or social media.
Contact a local Rural Mutual agent for more money management tips and other ways to ensure your financial future.
The information provided in external website links is for general informational purposes only and does not form any recommendation or warranty by Rural Mutual Insurance Company or its affiliates.