Anthony Marinaccio, an experienced Senior Vice President of Guaranteed Rate, has provided an insightful expose on the importance of budgeting during the COVID-19 pandemic.
As a leader that agents and clients genuinely value, Marinaccio’s vast knowledge of the mortgage lending space has resulted in homebuyers and agents consistently keeping him on top of his industry.
So many businesses worldwide are feeling the impact of the COVID-19 pandemic, and obviously, there is an impending economic collapse in most countries.
Creating a strategy to maneuver the impact of COVID-19 on businesses remains one of the most discussed issues in the financial sector.
While the lockdown measures put in place by countries worldwide have stemmed from the tides of the virus, most companies are feeling the impact because there was no prior provision for digital operations. This pandemic is creating a gross loss in most company’s revenue.
With any pandemic comes the need to be financially prudent, which makes it imperative for businesses and families to adopt an approach that places them in a better financial capacity. As a result of this, financial planning is essential in a Pandemic period, like Coronavirus. Budgeting is vital at this period as it offers the opportunity to spend on the essentials and shun frivolities. Therefore, here comes the question of how to budget your expenses to remain financially and mentally resilient.
Alter Your Expense Habits:
“As the crisis has resulted in significant changes in both your work and lifestyle, check your new financial status. In reviewing this, please note what are raw necessities, what changes can be made, and what attracts urgency to prevent an economic downturn”, shared Marinaccio.
What has decreased in your expenses?
Your major expenses must be carefully revised. Before the crisis began, your essential expenses might have been 50% of your monthly income.
Now that transportation and some other costs are not inclusive, find ways to cut unnecessary costs. This will help you to boost your monthly savings and increase it by a minimum of 10-15%.
Your discretionary expenditure may likely decrease as time goes by. Before the pandemic, 30% of your income might have been spent on going out, entertainment, and restaurant meals.
Given the restrictions to leave your home, the present pandemic can be a blessing in disguise. Meaning, you can generate significant savings here; that’s up to 20% of your monthly earnings.
Take a look at your previous bank statements and evaluate how much money you are saving monthly on things that you can no longer buy due to the crisis.
Focus more on essential commodities in your next investment
With these changed-ways of working and living, new importance would have surfaced in your expenditure like:
- Buying a new laptop
- Subscribing to more internet data and better bandwidth
- Video streaming services
- Gaming apps, and much more
Besides, as governments try to aid the citizens by rendering services that can reduce the burden, it’s your place to stay in tune with the current policies, and reach out to whatever support they are willing to offer you.
Reallocate your spending
If your income has been negatively affected by the pandemic, you can use the savings you’ve generated to supplement it. Consequently, that money can help reduce your debt, build an emergency fund, or top up your savings.
If you are lucky to find yourself in a better financial position or situation with no debt and healthy cash deposits, you might want to consider using your surplus to help a family member or a friend or invest in future-proofing your finances.
Future-proof your finances
After analyzing your funds, you should consider highlighting the weaknesses or threats you have to raise income, such as:
- Limited skills
- Over-dependence on a particular location
- The nature of your work and the overall demand for it
- Changing trends
Here are two straightforward ways to influence your financial standing positively.
Work more on improving your skills
Draw out a list of the things that could hamper your financial progress and start avoiding the ones that would cause the most significant challenges. This might mean that you learn a new skill, consolidate your knowledge, perfect your technique, and many more.
These tips, if used correctly, can help you prepare your family for unexpected circumstances that could arise in the future. Implement these tips today and watch your situation change!