Over the past months, I have been really worried about my finances. I have never been through anything like this, and I most certainly wasn’t psychic enough to predict this. So I found myself panicking over what to do! But then, I took the time to really look at my finances and calm down.
And I think this is such a critical thing to do right now for anyone. Here are some tips I have for reviewing your finances during COVID
Understand where your money is going and coming from
With all of the uncertainty in the world right now, it’s important to understand the ins and outs of your money. I know as I look at my next few months, and that I don’t have anything really coming in besides unemployment, I am going to be on top of my spending.
One critical step to do when thinking about your finances during this COVID pandemic is to know your expenses. And the only real way to do that is to go back and look at the past few months. What are some expenses that you are paying every month?
Once you have that, write down what expenses are necessities. These are things like rent, car insurance, utilities. You know, things you need to survive. Then go through and review any other expenses and see if they are things you want to keep.
Determine your priorities
Now that you know what the costs are for you to have the things you need to live, it’s time to make some tough decisions. I know, this isn’t fun, but its critical to any budget, and even more so right now.
Personally, I know my priorities have shifted in the last few months. While before I prioritized being social and having room in my budget to go out and grab dinner or drinks, now I feel completely different. Not only is that not possible right now since we can’t leave our homes, but I am also in full on job hunting mode. So anything that is going to help me with this, be it online classes or career services, are going to be what I spend my money on right now.
These priorities can also be long term. While my situation has changed, before I wanted to save up for a down payment. This is still totally possible right now, you just have to make it a priority for you during this process.
Plan based on current financial situation
One thing to remember right now is to set up your plan using your current financial situation. If you lost your job, it may be tempting to continue like you were before or as if you expect to get a new job quickly. But, the world is totally different now.
So, use your current income as your base. If you need to dip into your savings, but being a risk adverse CPA, I am only planning on doing this if it’s necessary.
The way I am looking at this time is that it’s a period of uncertainty, but it’s not a time that should define my financial future. What do I mean by that? Yes, you could be bringing in less income than before, but it’s not worth trying to keep up your spending and burn through your savings so in the next few years you have to recover that as well. That is there for if you need it to survive, not for a pair of tie dye sweat pants you saw on Instagram.
I know right now there is so much uncertainty, and that’s super scary. At least for someone like me Ms Type A Planner. But, it’s even more important now than ever to understand and be in control of your finances. And hopefully these three tips will help you feel more in control in such a crazy time!
Do you have any tips you are using right now? Let me know in the comments!
