Tuesday, February 23, 2021

How To Decrease Your Expenses During a Pandemic

 The Coronavirus pandemic has thrown the economy into turmoil, with millions of people losing their jobs and thousands of businesses shutting down. So now, more than ever, decreasing your household expenses is a priority. Resonate, a data marketing agency, conducted a study using 5000 Americans as the sample size. From the results of the survey, 80% of the respondents had grave concerns about their current finances.

Examine your spending habits

Taking a close look at your spending habits before and during the pandemic should give you a clear idea of the stuff you don’t need to help you reduce your spending. Some financial experts advise you to organize your expenditure into four broad categories. These are fixed non-discretionary expenses, variable non-discretionary expenses, fixed discretionary expenses, and variable discretionary expenses.

After separating your expenses into these categories, you should focus on the necessities such as rent, heat, internet service, healthcare, and phone. These are the fixed non-discretionary expenses. The next thing to do is to prune all the variable discretionary expenses such as new clothes and takeout. After doing this, you should have a surplus on your budget; if not, you must find ways to cut down on your variable non-discretionary expenses.

Prioritize expenses

Choosing needs over wants is the best way to cut down on expenses. There is always something that you can do without. When cutting out costs, be sure to trim every category of expenses and put your prime focus on your priorities. For example, if you’re planning a wedding this year and your spouse is a non-US citizen who lives outside the US, your top priority becomes paying for their k1 visa cost. This essential cost must be factored in and cannot be avoided. Therefore, look to cut expenses in many other aspects of your wedding planning process. 

Make use of mobile apps

If you need help to deal with your expenditure, several mobile apps can help you categorize your spending and help you trim and track your expenses. Others will serve as virtual financial counselors based on your current expenses.

Save whatever cash you can

This may not sound easy, but you should hold onto any cash you have at the moment and spend it only when you need to. You can cut down household expenses if you are smart about it. Identify the opportunities to save and plan out your costs. If you plan your meals, you could save on groceries. Staying at home more also means that you can save on gas, travel, and outside entertainment. You can keep any money spent on non-essential expenses somewhere safe, and it will add to your savings.

Reconsider your saving strategy

It is laudable to make payments into your savings account regularly. But you might want to reconsider it if you need more cash in hand. To offset current expenses, you could reduce the contributions you make to your savings account. It is an effective savings strategy to ensure you always have cash on hand. When you are in a better financial situation, you can go back to the previous contributions or increase the contributions to make up for the lost difference.

Get creative

Sometimes you just need to get creative when cutting out expenses such as those for entertainment. For example, when paying for streaming services, just settle on the essential and not the full package. After all, how often do you make use of the complete package? Another option is just to go for the cheapest option, or you could stick to just a single streaming service and forget the other ones in the interim. If you are internet-savvy, there are options on the web that will suffice your streaming needs.

Make the calls

List all your basic expenses and make the calls to negotiate your payment terms. This includes lobbying for reduced charges or a deferment altogether. This option should work great with credit card companies, insurance companies, and for your rent. Make the calls and tell them your situation while offering a payment option that will be favorable for both parties. The endgame is to reduce your expenses as much as possible during these challenging times.

Although times are tough and everyone is concerned about their welfare and finances, there are also opportunities to save some money. The best approach is to use the time you have on your hands to critically assess your household expenditure and then draw up a plan to reduce it. Then ensure that after lowering your expenses, you draw up a budget and stick to it. This should help you save some money that will tide you over until things get better.

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