If you’re like most Americans, you weren’t worried about your budget through the worst of the pandemic because you were using all your resources for the roof over your head and the food on your table. But now that the coronavirus vaccination plan is underway and states are lifting restrictions, it’s time to get your budget ready for regular life.
The trouble is, you might carry debt that didn’t have before the pandemic, or maybe the debt you carried into 2020 only got worse with time. So, the budget you used to go by isn’t going to work anymore. Luckily, this fact gives you a good opportunity to really analyze your spending so you can make the most out of the money you have while you pay off any outstanding debt.
Look at Your Income
If you have a budget, update your income numbers to match what you currently make. You want your income to cover your expenses at a minimum, but ideally, you want money left over after you pay your bills. With states opening up, vaccinations sweeping the nation, and businesses starting again, employment is on the rise.
So, if your income doesn’t cover your expenses with a bit left over, you might want to consider picking up a second source of income. If that’s not possible because everyone only has the same 24 hours in a day, the next thing you want to look at is your expenses.
Fix Your Expenses
You probably paid more for groceries during quarantine because of delivery, but you probably paid less for gas because you spent more time at home. In addition to that, wear and tear on your car, wardrobe upkeep, and your morning visit to Starbucks were probably something you didn’t have to worry about during lockdown. But now that the world is opening again, you’ll have more expenses to contend with, so now is the perfect time to plan for those.
List all your expenses, including the ones you expect to be responsible for in the near future, and look at each one to decide if they’re necessary. If they aren’t, get rid of them. For those you can’t eliminate, see if you can reduce them by calling your creditors and asking.
One expense you need to eliminate for good is any credit card debt you carry because debt is the enemy of wealth, and you can put that cash to better use. Maybe you accumulated debt during the pandemic, or perhaps you added to the debt you already had. Either way, credit card payments are a drain on your budget and only drag you down. Instead of carrying multiple credit card debt with no payoff end in sight, talk to Hawkeye Associates about debt consolidation.
They can help you roll your eligible obligations into a single loan with one monthly payment and a reasonable interest rate. That way, you can use the extra money you save to pay down your debt quicker or for other expenses to balance your budget.
Step Into the Market
Once you widen the gap between your income and expenses as much as you can, it’s time to decide what to do with the extra money you find. As mentioned, your first priority is to pay off your debt, but while you do that, you could use some of your money to invest for growth. Be sure to consult a professional for recommendations in diversifying your investment portfolio so you can reach your financial goals.
Your Budget Going Forward
Remember, your budget is a living, breathing, ever-changing tool. Revisit your financial plan every few months to make adjustments and stay on track. The more you pay attention to your inflows and outflows of cash, the better your chances are to build and maintain a solid financial foundation.