The coronavirus has hurt the nation’s economy and it has likely impacted your finances as well. While a recession is out of your control, you can take steps to tighten things up at home. Here are some tips to recession-proof your budget.
Add Up the Necessities
Go through your budget to see exactly what you need to cover the essentials. Your expenses might vary, but they likely include things like mortgage or rent, utilities, auto and health insurance, gas and groceries.
Now that you know exactly what you need for your “must pay” expenses, it’s time to trim the fat from everything else. If you’re not using a subscription service, cancel it. See about pausing your gym membership until the pandemic fades away. Cut back on ordering takeout. While it’s fine to keep some fun expenses, you want them to be few and far between.
As Cnet reports, many companies are offering pandemic-related relief. Take advantage of that aid. Call utility companies, credit card companies, student loan lenders and more to see what kind of relief they’ll offer. (Make sure to get it in writing and check that they won’t report you late on your credit report.)
Take whatever extra cash available in your budget and use it to fatten up your emergency fund. As always, you want this account to be able to cover three-to-six months of expenses. If you already have that amount, keep adding to it until things settle down. Don’t neglect your investments, but for the immediate future, your emergency fund should be a priority.
Article originally published by Chris O'Shea on Savvymoney.com