How to Adjust Your Budget During Financial Hardship

As we’ve seen the rise and imminent fall of the worldwide COVID-19 pandemic, there have been many individuals who have suffered financial hardship.

Goals set at the beginning of the year are jeopardized by fewer work hours, loss of employment, or the added strain of isolation and quarantine.

Pandemics tend to be few and far between. But economic uncertainty, financial hardship, and natural disaster are always possible.

How can you be prepared to adjust their budget during during financial hardship?

The following ideas are helpful guidelines on how to manage your money in these times.

Factor in Potential Government-Funded Aid

During this COVID-19 crisis, Congress has passed, and President Trump has endorsed the CAREs Act, designed to provide struggling individuals, businesses, and families with a government-endorsed check.

The hope is that this added financial help from the government will help encourage citizens to start spending and pick up the pieces of the fragmented economy.

Government aid is not unique to the coronavirus pandemic, although its scale and magnitude in this circumstance are substantial. The government regularly contributes humanitarian resources to those affected by natural disasters and national emergencies.

Related: Coronavirus Financial Impact & Back to the Basics

While government-based financial aid is beneficial in these circumstances, it is important not to rely on it.

For various reasons, you may not be eligible. Or the wait time to receive assistance may be longer than expected.

No matter the circumstances in which you receive government-based financial aid, carefully consider how you will use this money.

Focus on your/your family’s needs. Save the rest to prepare for the aftermath of this pandemic.

Adjust Your Budget During Financial Hardship to Include Monthly Savings

Previous generations understood the importance of systematically setting aside part of their income each month.

Today, building a long-term savings account can be a bristly idea for some. In a world where it’s never been easier to spend money, you may underestimate the importance of having a “savings” portion of your budget.

Setting aside a portion of your earnings is an important preemptive step to facing financial hardship.

Having even a small amount of reserved money can be life-saving. Begin now, even during these uncertain times, to set aside a small amount for a savings account.

A healthy savings account will bring you added peace for the rest of your life.

Keep Your Focus on the Necessities

During the time of financial hardship, your main priority should be affording the necessities. While superfluous spending, shopping, and luxury can be exciting and entertaining, such expenses diminish your probability of financial stability.

Necessities include immediate needs like housing, water, food, and utilities. Other needs include basic clothing, hygiene items, and personal essentials unique to you or your family.

Related: 8 Tips for Surviving on a Low-Income Budget

Spend Less

After you alter your spending habits to stabilize your needs, life will simplify.

Simplifying your life will naturally mean you spend less. You will spend less on fuel, less on travel, less on recreation, and less going out to eat.

Consider buying non-perishable, shelf-stable food items.

These foods, such as boxed pasta, cereals, canned soups, etc., tend to be inexpensive and can be bought in bulk. As you spend less, you’ll be able to hold on to extra spending money that could prove invaluable as conditions during the crisis change.

Related: 6 Causes of Overspending That Are Holding You Back

As you streamline, you may discover simplicity is bliss. The most enjoyable parts of life don’t cost any money.

Dance in the living room. Toss a football in the back yard. Enjoy a beautiful sunset. Write a kind note to a friend.

After financial hardship passes, if you follow the guidelines in this article, financial stability will return. You will know when it is time to spend money on non-essentials.

Remember the lessons you learn through COVID-19.

Back to Budget Basics

When it comes down to it, adapting your budget during financial hardship means getting back to the basics. Educate yourself on your eligibility for government assistance, set aside money for savings first, focus on necessities, and spend less.

For more ideas, tips, and financial quips, check out our other blog posts!