A growing percentage of Indians are out of work or have the insecurity of being laid off due to the coronavirus pandemic.
If you are one of them and have to rely on finances that you had saved for an emergency, you’ll want to be smart about how you spend that money.
Here are a few pointers on how to budget the money you are left with.
Eliminate the expenses you don’t truly need
If you’re cash-strapped, the first thing you’ll want to do is analyze how you spend your money.
Make a list of everything you are currently spending money on and mark the items that qualify as “CONTROL”. These could be electronics, online shopping, eating out, subscriptions or clothes. These are items that might be important in normal life but could go in recessionary times.
This elimination is not permanent, but it could free up some cash.
Now make a list of the things that are “MOST ESSENTIAL” like your rent or mortgage payment, food, insurance, and utilities.
Now divide the savings by the new monthly expense number you just calculated. This will give you an idea of the next few months of’ survival.
Prioritize your remaining expenses
Food and accommodation should be your top priority. Instead of making online food orders, start cooking yourself- cost-cutting plus healthy food.
Next is making your housing payments, for which you can contact your homeowner to discuss payment options.
After prioritizing food and housing, you’ll want to figure out the smartest way to tackle your other expenses. The one becomes difficult to be flexible, consider paying that bill first so you won’t owe late fees.
Make minimum debt payments if you can
If you can afford to pay the minimum on your credit card balance, do it. If you don’t, you may owe charges and extra interest, and your credit score could be negatively impacted.
If you cannot make payments at this time, contact your card issuer right away.
It sounds simple, but reaching out to your various providers — mortgage lenders, student loan providers or credit card companies — to review your options is essential. You won’t know what’s available if you don’t ask.
Try negotiating with every provider you can. Thousands of people have been laid off or have the insecurity of job loss due to the coronavirus outbreak, which means you’re not alone in the game. Keep a constant look at your budget and reduce costs wherever you can.
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