Budgeting and fiscal responsibility are difficult during the good times, but even more challenging during a crisis. The Coronavirus has impacted millions of people across the world in a variety of ways. Many aspects of life are out of our control, the one thing we can control is our fiscal responsibility and become disciplined on our personal and small business budgets.
Recommendations on Budgeting & Fiscal Responsibility:
1. Budget, Budget, Budget: We all have time to review our finances during the continued month of social distancing and remote work. Take the time to review where your money is being spent and how much is being spent per day. It is never a fun process to undertake, but one that is necessary to truly understand.
2. Making Hard Choices: Where can you make cuts? If your gym has not stopped charging you for the monthly membership, it might be time to cancel the membership for a while. Is there any opportunity to reduce your monthly cellphone bill? Does your organization offer a discount you have never taken advantage of? What about an online defensive driving course to reduce your car insurance payments? Is there opportunity to renegotiate interest rates on car, mortgage, credit cards? Look for creative opportunities to cut costs, when it starts to hurt, cut more. Not a bad time to look for coupons and other discount options.
3. Food & Grocery Lists: Shop for only the necessities and find ways to reduce costs in the grocery stores. Healthier options are more expensive; however, we should be focusing on physical wellness as well. Look for discount options and only shop once per week if possible. Make a list and stick to only what is on that list.
4. Student Loans: The federal government has suspended payments and interest accrual on all federally backed student loans through the end of September 2020. Now is the time to check with private lenders to ask about suspended payments during the same time period. Remember one thing, payments are not going away, and they will be due in the future. I recommend paying down as much as possible when no interest is accruing if you can afford to pay.
5. Retirement & Savings: If you can maintain the match contribution for retirement, I highly encourage anyone to do so. Do not leave free money on the table, if the organization is matching, ensure you maxing out the match. Liquid savings is there for situations such as this. If you do not need to use the savings, do not touch it. If you can make contributions to savings, as little as it might be, continue to save. Look for high interest online accounts, it makes it hard to dip into the savings account, which maintains fiscal discipline.
6. Ask for Help: Setup time with your financial advisor or retirement planner. Most retirement providers are offering virtual sessions. Look for additional resources, aps, webinars, tools, budget spreadsheets, etc.
Set challenging goals and reward yourself when you do meet one of these goals. Thoroughly understand need versus want during. Do you really need, or do you just want it? Once you embrace this mindset, you can make significant changes in your financial health. Financial discipline is something I have practiced for many years. Embrace the challenge and evolve your thinking about finances. Look for opportunities to reduce waste and change to a lean approach to budgeting, both personally and professionally.