7 Ways to Handle Financial Stress During COVID-19
COVID-19 has caused major economic issues with a virtual shutdown of the economy causing loss of business income, jobs, and reduction of working hours.
These combined issues have caused major financial stress for households as unfortunately the bills and expenses do not stop just because the economy has.
For the week ended March 28, 6.65 million people in the US filed for jobless claims alone.
So although some things are outside of our control right now what can we be doing to manage financial stress?
These 7 tips on handling financial problems may help you out in coping with financial stress
1. Review your current spending
You can’t create a plan and determine a budget if you don’t have an idea of your current spending and outgoings, so get a grip on this first.
- Get your last 6 months of bank statements and if you use cash, estimate what cash you utilize.
- To get a better idea of cash outgoings, record it for a weekly period.
- Ensure you don’t miss obtaining any relevant statements, for example, if you use PayPal, ensure you get a copy of that statement also.
2. Create a budget
Creating a budget is one of the best ways to manage money and lower financial stress. It may be unliked but it’s necessary and a great way to keep on top of things financially and combat financial worries.
From reviewing your spending in tip 1 you will probably find expenses you can cut down on, eliminate, or find better ways to spend.
Your budget should ensure you cover immediate expenses and obligations like loan repayments.
You should then look at what you can save, if possible.
Also, watch this financial advice video on creating a budget and sticking to it:
3. Track your progress
Track your progress over the shorter term such as days and weeks – keep a spreadsheet of actual expenses so you can compare it with your budget.
After a month, sit down with your partner and determine how you went against the budget.
If you can go below the budget for some items then edit your budget. There may be items in which you need to adjust, but only if it is a necessity such as it being related to an essential item.
If you can put this in practice, you will get a handle on how to overcome financial stress and be good with money.
4. Think about changes
Some changes such as eating healthy can not only help our waistlines and overall health but they can also lead to decreased food spending as we are eating less processed meals.
This is a good example of thinking about not only the financial benefits but health or other benefits related to certain changes.
Right now for example is also a great time to be doing DIY activities around the house if you’re a homeowner.
Learning how to cook if you don’t regularly cook is another great example of an activity we can do right now which can help our finances not only right now but also post COVID-19.
5. Consolidate debt or get the best deal
If you have debts across multiple providers or products then consider whether you are getting the best deal.
For example, you may be able to consolidate a range of high-interest credit cards under a personal loan with a lower interest rate or even under your home loan or line of credit facility.
Seek help from a financial advisor if required.
If you have a home or investment loan and haven’t reviewed it in a while then check your interest rate. You may be able to get a better rate by changing providers.
6. Think creatively
Be innovative around how you can save to reduce your financial stress.
Consider looking at deal/coupon sites or consider what items you regularly use that you can purchase in bulk at the supermarket or discount store.
There are several great ways to save. You can even learn to make your own DIY cleaning products at home using natural ingredients!
7. Be thankful
When you have done what you can to manage your finances then stop thinking about it.
Taking action is the key but then fretting about it endlessly will not add any value. Be thankful for what you do have and enjoy simple activities with your family.
Although COVID-19 has brought about financial stress for many, there are things we can do to help manage our finances.
Hopefully, these pieces of actionable advice on how to handle financial stress will help you curb your anxiety around how to handle money during the pandemic.
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