Money Budgeting Guide During A Pandemic [Infographic]

Kimberly Tan https://pawnhero.ph 4m 897

The views of this article are the perspective of the author and may not be reflective of Confessions of the Professions.

The pandemic has affected all facets of our lives. From the way we work to the way we socialize, nothing from the old normal was spared. And we all had to learn how to adapt to the new order of things. After all, we cannot be complacent. If we fail to follow health protocols championed by scientific and medical experts, we run the risk of contracting the COVID-19 virus. And we put the people we love in danger too.

The importance of our strict and collective adherence to safety measures, such as wearing a mask when we go out and social distancing as much as possible, cannot be understated. It’s the most we can do to help medical practitioners at the frontlines of this battle. Our healthcare system needs our cooperation so that it does not collapse under the sheer weight of the pandemic.

Unfortunately, to some people, that would mean you can no longer pursue the same career opportunities available to you before the pandemic. For others, it could mean officially leaving your work, whether out of personal choice or due to retrenchment.

That is where another complication related to the pandemic comes in. It’s easier now than ever to lose control of our finances, especially if there’s no income stream to manage in the first place.

Fast facts and statistics

In 2020, 4.5 million Filipinos lost their jobs due to the pandemic. This led to the country reaching its highest unemployment rate in 15 years, peaking at 10.4%. The prognosis is that many Filipinos may remain unemployed and live below the poverty line until 2022. 

If you’re lucky enough to still have a job and a regular income stream, it’s crucial that you start being more conscious of your spending. After all, these are precarious times. There’s no saying when the pandemic will end and which industries will thrive in this undeniably tumultuous economic landscape. To help you better manage your finances for the sake of staying proactive, it’s high time to give budgeting a try. 

Budgeting tips

Budgeting is no rocket science. In fact, you only need to take to heart two rules of thumb.

The first rule is to prioritize your bills and living expenses. Before any other expenditures, take care of the basics. Those include your rent or mortgage bill, groceries, utility bills, credit card bills, and outstanding debts. Once these expenses are duly covered, you’ll have peace of mind. Housing, food, and utility are the trifecta of survival. Meanwhile, credit card debt and other loans are best prioritized because they incur interest. Not paying them on time means what you owe gets bigger exponentially.

The second rule of thumb is to cut down on non-essential expenses. These may include online shopping, clothing, cable TV, streaming service subscription, and food delivery. These are non-essentials because you can live without them.

You may argue that you’re used to having them, and without them, your quality of life will be drastically affected. If that’s the case, you must confront the current reality of your finances. If there’s no room for these expenses, compromise. You can always have them back once you’re in a better place money-wise.

Money management hacks

On top of the two rules of thumb mentioned above, you can also adopt these money hacks.

Try mental accounting – Use labels and separate expense categories. This will help you stay conscious of how you are spending. It will be easier to recognize which expenses you can do without.

Take advantage of pawnshops when you’re low on cash – If you’re in a dire strait cash-wise, don’t shy from visiting a nearby pawnshop. They will welcome an array of valuable goods, including jewelry, gadgets, and even designer bags or shoes. You can have your pawned items back once you have the money to pay your loaned amount on top of a small interest.

Set aside an emergency fund – Ideally, you’ve started building your emergency fund as soon as you joined the workforce. But if you failed to do so, start now. It’s better late than never. Your emergency fund will make you sleep better at night, knowing you have resources to tap in case of a medical emergency, for instance.

Take care of your health – It’s best if you do not experience a medical emergency even if you have an emergency fund to tap. So take care of your health. Eat right. Exercise regularly. And avoid vices and stress as much as you can.

Live within your means – This is a basic financial principle. Do not spend money you don’t have. And as to the money you do have, get wise with it.

Use a budgeting tool – Track everything that goes in and out of your savings account. Apps you could try include Acorns, Pocket Guard, and Mint.

The Takeaway

The pandemic has been challenging for all of us, especially concerning our finances. But we cannot allow the situation to compromise our financial health entirely. We can pursue simple hacks that will ensure better management of our income stream. Budgeting serves such a purpose. And we must commit to it as strictly as we do health protocols.

Hopefully, by the time the pandemic officially ends, your finances are still in order. That would be a testament that you played it smart, money-wise.

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