1. Don’t defer payment on anything you can afford to keep up
While many banks are offering deferrals, they come with a price. Paying extra interest on interest to get a deferral when you have the money to cover your mortgage (even if that means cutting discretionary spending) is never a good idea.
The same goes for paying bills, debt, and other essential payments. The money will have to be paid back eventually, and putting it off until tomorrow comes with a potential extra cost in the form of interest, late fees, and other costs plus extra future stress.
2. If you’re on a fixed income, consider adding up to 10% to your expenses as potentially the pandemic may cause some inflation.
Now is the time to be cautious and realistic in future planning with your money.
The pandemic is most likely going to be affecting everything from tax rates to shipping costs to cost of goods, and no one can predict exactly how the world will look this time next year. If you are living on a pension, disability, or another form of fixed income, you will have to take a good look at your expenses and may have to pay up to 10% more for the essentials overall.
Planning for this higher base expense now will pay off in the long run.
3. Focus on needs versus wants and save every dollar you can (don’t just find new ways to spend.)
If you’re finding yourself with more time to think and less places to spend, you have a good chance of coming out of this situation ahead or at at least on par with where you were before. That is, as long as you don’t replace your former daily Tim’s with extra purchases of snacks and your regular eating out with curb-side takeout.
Focusing on your needs and upping your savings today will keep you in healthy financial shape heading into the summer and beyond.
4. Avoid impulse or emotional buying online
The one thing most of us are still able to do these days is shop online, and with the increased convenience and free shipping that is being advertised across social media daily, it can be easy to disconnect from your goals and hit the “Buy Now” button without a second thought. Impulse buying isn’t just a chocolate bar at the grocery store, it’s the hidden spending you convince yourself you “need” to do – especially when you’re emotional or bored – that adds up.
Hide your credit cards, and leave your Amazon account alone. You’ll thank yourself later.
5. Stick to your budget for food and save any extras for the “unknowables” in the future
Food is one of our highest expenses these days, and the cost of goods aren’t going down. It’s easy to want to treat yourself to desserts, treats, snacks, wine, beer, convenience foods when we’re stressed and uncertain – it’s not called “comfort food” for no reason! These days, it’s even more important to make and follow a grocery list.
As easy as it is to spend extra, saving even a few dollars a week on grocery extras add up fast too.