We are in a period of uncertainty and fear. Many of us are going through changes to how we live and work. Some changes are relatively minor like not being able to dine out, while other people are struggling to balance childcare and work, and others are experiencing the pain of job loss.
Whatever your current situation, it is a good time for all of us to take stock of our situation and make financial changes to prepare for potential financial disruptions. At best this will be quick with us all wondering about the fuss; at worst we may need to prepare for an extended recession and/or great depression.
So what financial steps should you take right now?
- If you have a budget, refresh the data to fully understand your financial state at this point in time.
- If you don't have a budget, start by creating a budget to assess your financial position. Here are some resources in case you need help getting started:
- Reduce non-essential recurring expenses. Typically I would advise you to cut expenses like cable and streaming services. This might be a better time to focus on reducing those expenses instead of cutting them out altogether. For example, consider changing to a cheaper cable package (if there are no sports on, why pay for the sports package?), or cutting the cord in favor of a single streaming service. Revisiting expenses like gym memberships would be a good idea as well.
- Cut expenses for services you can do yourself. All of the small services we use can add up to a big chunk of your budget. Having your car washed every week or buying a cup of coffee every day can add up to $1000s of dollars a year. One word of caution here. Don't go broke trying to save a dollar. If you need to make a large investment to do a service yourself, it could be cheaper to continue using the service.
- Switch to a low-cost phone provider. You can get cell service for as low as $14-50 per month. Our team members have used various services for years with great results. We highly recommend Ting & Tello.
- Price compare all of your services – If you haven’t changed insurance, cable, phone, utility carriers in years, now is a good time to shop around for the best rates. Services such as The Zebra and Whistleout help you conduct price comparisons.
- Negotiate lower rates with service providers. We’ve successfully negotiated lower rates with DirecTV, AT&T, and Xfinity over the years. This does take a significant amount of time. If you are swamped, consider using a bill negotiation service such as BillCutterz to negotiate on your behalf.
- Stop dining out. This may be the hardest one on the list for me. I love variety and eating out with friends. Many cities are only allowing takeout right now, but that is still quite expensive. Now is a great time to take on cooking as a hobby. Don’t know how to cook? Here are a few of my favorite free resources for tips, techniques, and recipes: Serious Eats, Tasty, and Bon Appetite YouTube
- Shop at your local farmer’s market for fresh fruit, vegetables, and meat. Many items can be had for less than the average supermarket price. This can vary a lot by market and season so be sure to price compare. Bonus points for supporting local businesses!
- Reduce electric usage. This is harder when you are home for extended periods, but you can still make a noticeable dent by making a few small changes. Turn off lights when you leave the room, turn off your computer when not in use, and unplug electronics that aren't necessary.
I hope you are all staying safe and healthy! Check out our ideas on free family entertainment if you are going stir crazy!