The anxiety over the COVID-19 pandemic and the associated financial fallout can make people feel “paralyzed”. However, you can start wherever you are, use whatever you have, and do all you can to see through pandemic time. If you didn’t set up and finance an emergency fund, this isn’t the time for beating yourself up over such a thing. Instead, check to determine your resources and learn how to deploy them effectively.
Although some people could already be financially savvy, the pandemic has made us realize the importance of managing our finances. If you are just getting started on the path to financial well-being, the tips below can help you stay afloat financially during the pandemic by keeping you on the right track.
Prioritize Your Expenses
It would help if you prioritized your spending during the pandemic; there isn’t any way around this. How mindful you are of your expenses will determine how you’ll see through the pandemic. The expenses can be classified into those you can’t stay without (necessary or fixed expenses) and those that aren’t necessary but having them is nice (Discretionary expenses).
The discretionary expenses are usually convenience-based (purchasing from your nearest grocery store although it is expensive), emotional-based like treating yourself like the others, or panic purchases (buying a lot of hand sanitizers). So always ensure that you’ve covered your necessary expenses and reduce the discretionary spending as much as possible.
Keeping Track Of Your Finances
Knowing the amount of money you have and where it is going is always a good thing, pandemic or not. Budgeting goes a long way in this case. Start by determining how much funds you need to cover the basic needs: mortgage or rent, household supplies (toilet papers, laundry detergents, and paper towels), electricity, and internet. Many online tools can help you track your expenses easily to ensure you stay afloat financially. Leverage these tools to ensure you can easily track your money.
Strategically Use Your Credit Card
Must you carry balances? If so, the use card(s) has the lower interest rates first to reduce the interest you’ll have to pay. Do not max out any one card; spread your spending across your multiple cards. If you are a business owner, you can use your corporate credit card to inject some cash to your business. Knowing what can adversely impact your credit score helps you limit any amount.
Pay the smallest minimum due, knowing you’ll be facing tough times navigating the pandemic. If paying in full this month might endanger paying the following month, don’t do it. You must avoid missing a payment entirely since going over 30 days overdue might stay on your credit for about 7 years.
Although a credit card balance might reduce your credit scores, you can address that damage upon the end of the financial crisis. Your credit card scores will rebound after you’ve lowered the balances. If you have had some credit missteps that led to collections, don’t let the creditor pressure you to prioritize that debt now. Preserve your money for covering your living expenses, and you’ll deal with later with the collections. Contact us at Freedom Debt Relief to learn more regarding debt management.
Home Refinancing
The other way you could stay afloat financially during the pandemic is by home refinancing. During the pandemic, the mortgage rates are quite low and might remain so for the next several years, making this the best time to consider refinancing your home. However, you should note that refinancing has some attached fees like loan origination, appraisal, and application fees.
Additionally, the fees are different per client depending on the amount of loan, year and time you bought your home, the interest rates.
With the pandemic’s severe financial and economic impacts, you need to be savvier with your finances. Minimize the discretionary expenses and use the various strategies to stay afloat financially in the pandemic. If you have some credit card debts, talk with a reliable debt management company today to consolidate the credit card debts and find a way to help you navigate the pandemic.
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