Using the COVID-19 Pandemic to Get Your Finances in OrderSeptember 10, 2020
This has been a challenging year in many ways. Despite the challenges, however, many people are doing their best to make the most of a difficult situation by accomplishing goals during their time at home.
If you have some extra downtime, this could be the perfect opportunity to work toward your financial goals! If you’re ready to get your finances in order, here are a few suggestions to get you started:
Save for an emergency fund
There’s no way to avoid all of life’s accidents, but you can be prepared for them. Saving for an emergency fund means intentionally setting aside a percentage of your income for necessary expenses in case of unexpected expenses.
Emergency funds are meant to cover absolute must-haves, like food and housing, rather than entertainment-based expenses like vacations and dining out. While it’s fantastic to save toward those things, too, you should first set aside money for your emergency fund, then focus on secondary expenses.
It’s common to save a $1,000 emergency fund at first, then to work toward an emergency fund totaling six months’ necessity expenses. Reaching a full emergency fund is an incredible accomplishment, and also means you can breathe a sigh of relief knowing you’ll be taken care of if the unexpected happens.
Cut back on spending
Focus on eating at home
With almost half of the United States now working from home, it’s easier than ever to avoid the drive-thru at mealtime. If you’re working from home, this is the perfect time to practice cooking your meals. To take it a step further, you could even try meal prepping!
Preparing a meal at home costs, on average, about $4. Compared to the average cost of eating out at $13 per meal, food savings top $180 weekly if you’re eating three meals per day. Cutting back on the cost of dining out is a great way to lower your regular expenses and to get your finances in order.
Save on travel expenses
Whether or not you’re working from home, travel options are limited as a result of the COVID-19 pandemic. Consolidating your errands into one trip and limiting unnecessary miles on your car are both great ways to save a little more during this time.
If you are working from home, what a fantastic opportunity for savings! Instead of spending the money that you’re saving on work travel elsewhere, consider making progress toward a specific financial goal or even adding to your emergency fund.
Learn a few simple home repairs
If you find yourself with a lot of time on your hands, especially time at home, why not learn a few do-it-yourself repairs? Even if you don’t need to update your home right now, you could save a significant amount in the future by knowing how to make minor adjustments yourself.
From instructions on installing a faucet to fixing a broken drawer, the Home Depot has a number of DIY home project guides on their website to get you started. Best of all, the guides are free and offer step-by-step instructions for first-time fixes.
Use your extra time wisely
Improve your credit score
Improving your credit score is a fantastic way to get your finances in order. Even though you can’t boost your credit score overnight, you can make a few smart money moves right now that will put you on the right track.
Paying your bills on time is the most effective way to keep your credit score high. While you have a little extra time at home, look to see if your bank offers an automatic bill pay option. Automatic bill pay is a phenomenal way to set up your payment schedule, then let it take care of itself. This is especially useful for regular monthly expenses like rent, mortgage, car and utility payments.
Even if you prefer to handle your payments manually, create a payment schedule by setting reminders for important dates. With This will help you to stay on top of important expenses, and you can enjoy the benefits of having a strong credit score.
Make some extra cash
Boredom can be a catalyst for creativity. If you like to play the piano, consider making a little extra money by teaching beginner piano lessons. If you enjoy shopping, try bringing in some side income by delivering for Instacart, DoorDash or a similar service. Now could be the perfect time to turn your hobby or favorite activity into a side business.
What to do if you’re struggling financially during the COVID-19 pandemic
Reach out to your lenders
The COVID-19 pandemic has, unfortunately, created financial hardship for many people worldwide. The U.S. unemployment rate hit an unparalleled high of 14.7% in April, leaving many families without the financial resources for necessities like rent and groceries.
If you find yourself in a difficult financial situation resulting from COVID-19, speak with your lenders and landlords to discuss a mutually beneficial solution. Many businesses have deferred monthly payments, and the federal government has suspended interest on student loans for the remainder of the year.
We understand how difficult it can be to navigate this time. If you’re an ELFI customer in need of assistance, our expert Personal Loan Advisors are available to discuss your financial situation.
Prioritize the necessities
If the COVID-19 pandemic has negatively impacted your financial situation, make the most of your income by temporarily limiting unnecessary spending. From eating at home when possible to enjoying free or cheap recreational activities, these short-term sacrifices may better your long-term financial health.
Check for forgotten expenses
If you’ve tried everything but your expenses still feel overwhelming, one way to get your finances in order is by making sure you’ve canceled all the monthly or automatic payments for services you no longer use.
Check your credit card bill to see if you’re making automatic payments on anything you may have forgotten. This can be everything from streaming services you no longer use to app renewals you’re still being charged for. Even a few dollars each month can add up if you’re unwittingly paying for several unused services.
Additionally, take stock of your utility bills to see if your expenses have been slowly climbing. If your utility costs have grown significantly, discuss the expenses with your provider. If you can’t come to a resolution, consider exploring other options to see what might be available!
Finally, student loan refinancing can be an effective way to lower the interest and extend the term on your current student loan payment. If you’d like to decrease the amount you’re paying each month, determine whether student loan refinancing might be the right fit for you.
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