3-Step Guide to Adjusting Your Budget During COVID-19

Creating and adjusting budgets has always involved factoring in the current circumstances of an individual and their lifestyle. With the COVID-19 pandemic disrupting the entire world, everyone has had to adjust the way they spend, move, and go about their daily lives. With many Canadians losing their jobs and struggling to keep afloat, reassessing expenditures and adjusting budgets have become increasingly crucial to survive.

People’s lifestyles have radically changed, which means having to optimize habits and routines to minimize losses—especially in terms of financial decisions. 

To help in this endeavour, here are three easy steps to adjust one’s budget and work towards the new normal:

Step 1: Review Current Expenses

With new protocols in place, most people have been staying home and self-isolating in order to prevent contracting the virus. This also means that many of a person’s usual expenses—such as a phone plan with a large data consumption package, for example—can be adjusted to something more affordable because of the circumstances—like being constantly connected to one’s home’s Wi-Fi, continuing the aforementioned.

Reviewing current expenses is necessary for individuals who want to optimize their spending, as it highlights payments that are no longer necessary. This could come in the form of many things, like buying coffee from a nearby café, cancelling subscriptions, or eating at home instead of at a restaurant. While these adjustments may be temporary, it may also draw attention to expenses that an individual can do without—which can actually benefit in the long run.

Step 2: Funnel New Savings into Necessities

Eliminating expenses that have been deemed unnecessary opens up opportunities for new savings. These savings can be funnelled into necessary expenses, such as rent and food. With many people’s income streams hampered, property owners and lenders have become more understanding of delayed rent payments. This means that they are more likely to be willing to discuss various other payment options. Additionally, some provinces have announced plans to assist renters, which should help alleviate some of the financial stress.

While food is a necessity, the way people consume it can also be adjusted in order to rack up more savings. Instead of constantly ordering-in food, cooking meals at home will help significantly cut down on expenses. 

For other necessities, such as toiletries, it’s more cost-effective for individuals to avoid stockpiling. Otherwise, buying large amounts of certain items can deplete savings from a budget that could have gone into bills payment or debt.

Step 3: Make Plans to Pay Debts

The first thing that should be done after accounting for necessities is working towards being debt-free. It’s important for individuals to cushion themselves as much as possible from any more losses brought about by the pandemic—and paying debt is a good place to start. 

Many lenders and utility companies have begun to adjust their payment policies in order to accommodate those financially strapped. With flexible payments, Canadians will be able to stay on top of important expenses while still supporting themselves. It will also help them from incurring late payment fees and higher interest rates.

The Bottom Line

Financially sustaining oneself during a pandemic can be very difficult, but not impossible. As Canada is slowly reopening and recovering from the losses brought by the lockdown, more opportunities are opening up to secure financial stability. These steps are sure to provide some guidance and insight into getting back on track.

Personal debt relief can be tricky, but DebtHelpers.ca has been helping Canadians work towards becoming debt-free through customized comprehensive solutions. In need of financial advice? Fill out a form today to get a free consultation.