Since the onset of the COVID-19 pandemic, many industries have experienced sweeping job cuts. Unemployment has been growing, and more Americans applied for unemployment benefits in the last several months than in many years prior. To make matters worse, there’s speculation that unemployment could continue longer than expected, even if American society returns to what some would like to describe as “normal.”
As a consequence, budgeting is tougher than ever – and it’s crucially important to have an effective financial plan, a good budget, and a flexible mindset. Families are using these tools to stay afloat, and the team at Symmetry Financial Group has created this strategic plan to help navigate these difficult times.
Find out what unemployment benefits you qualify for
COVID-19 has led states to make major changes and updates to unemployment benefits, including benefits for self-employed individuals, “gig” workers such as rideshare drivers, and more. If you’ve lost a full-time job or seen a significant decrease in contract income, you likely qualify for some form of unemployment benefits.
That said, be ready for a long, often slow process. Many offices are flooded with claims requests right now, and it may take you weeks to qualify for and receive your unemployment benefits. In the meantime, you may need to tighten your budget.
Draft a new budget
Once you receive your unemployment benefits, you should be looking at this money as a substitute for your paycheck – not a source of supplemental income. Determine exactly what’s coming in, what your monthly expenses are, and the precise amounts that you can spend – and need to set aside.
As you build this new budget, you’ll likely want to draft out what you owe every month towards living expenses, what your family is bringing in, and what’s being spent. Clearly organizing this information now can save you significant hassle and frustration later on.
Make adjustments as necessary
As you determine how to work with your new budget, make changes as needed to help you meet your goals and focus on key priorities. Determine what your absolutely vital expenses are and get as specific as possible while you don’t have the support of an employer. You can use this strategy to set aside money for emergencies as well as ensure that you can meet monthly mortgage or rental payments, which can provide you with some much-needed solace in this difficult time.
Cut back on expenses where you can
Takeout, delivery, dining out, and other luxuries might not be affordable at this time, and that’s okay. Instead of splurging, figure out how and where you can cook at home, make things whenever you can, and resist the urge to do a lot of online shopping while you’re at home. Keep taking care of yourself but do it within reason – and make every occasion that you do spend a little extra all the more special.
Create a solid emergency fund
More than ever before, an emergency fund will provide you with some much-needed protection in the event of a medical event, a car accident, or something else that could have a significant, negative impact on your budget.
Even setting aside $1,000 can make a huge difference, so start saving now, and set aside anything left in your budget at the end of the month when you can.
Think about life insurance
If you have a life insurance policy, now is not the time to drop it. You can work with an agent at Symmetry Financial Group to determine how to make arrangements to keep your life insurance policy active at this time, as well as how you may be able to take advantage of products like cash value insurance to better protect your family.