If you’re out of work right now, you aren’t alone. Millions of Americans have had their lives and livelihoods upended by COVID-19. But just because you don’t have an active income doesn’t mean you can’t benefit from a budget: In fact, it’s even more important to have a financial game plan in place as you get back on your feet.
Traditional budgeting dictates that you should spend no more than half your income on necessary expenses. But what do you do when that income is zero? Of course, you still need to cover non-negotiable costs like housing and food – and this is where “bare-bones budgeting” comes into play.
Know what you need. Tally your core expenses and estimate how long you’ll need to cover them until you can return to work. You’ll need to budget with money from your savings, unemployment benefits, temporary work or other revenue streams. But remember: Not all sources of funding are equal. Debt, and especially credit card debt, should be a last resort after you’ve exhausted your other options.
Stretch your dollars. When it comes to cost-cutting, there are plenty of tips online that you can adapt to suit your budget. Small changes can add up to significant savings.
- Plan your meals around cost-friendly ingredients like rice, beans and frozen veggies, avoid pricey items like bottled water, and pay in cash at the grocery store to avoid overspending.
- Adopt a simpler haircut and learn to cut or dye your hair at home.
- Reduce your utility bills by hanging clothes to dry, turning the thermostat up a few degrees, washing clothes in cold water and reusing household supplies.
- Encourage your kids to play outdoors, or visit your local library to borrow books, DVDs, CDs, video games, magazines, and newspapers. You can also use free, ad-driven streaming services like Spotify, Pandora and YouTube.
Find creative ways to earn. A little temporary income can reduce the burden on your savings, and that makes a big difference over time.
- Freelance. Know your talents and look for ways to leverage them. Are you a talented artist? Can you offer piano lessons? Do you have landscaping experience? Reach out to family and friends to see if they know anyone who could benefit from your skills – and don’t be shy about recommending yourself to others.
- Pick up a gig. If you’re balancing childcare or an irregular schedule, consider driving for a car-sharing service or delivering food. Gigs can be a quick in-between job when you’re available – especially on weekends, evenings or early mornings.
- Sell. Trade in newer electronics for older models, sell household items on Craigslist, Ebay, Let Go or Facebook Marketplace, or host an old-fashioned yard sale for some extra revenue.
Track your spending. Use technology to manage your money without trips to the bank or extra paperwork. With Axiom’s no-minimum-balance digital banking, you can easily open an account online, transfer money to your savings and check all your transactions from your phone.
The last tip? Get started today. Financial planning may seem daunting at first, but it pays off in the long run. So take the first step to create a realistic budget – and reclaim control of your finances.
Axiom Bank N.A., a nationally chartered community bank headquartered in Central Florida, provides retail banking services, including checking, deposit, and money market accounts. It also offers commercial banking services, treasury management services and commercial loans for real estate and business purposes.
