In the United States, it’s now been several months since coronavirus (COVID-19) arrived and changed our daily lives for the time being. Throughout these months, most of us have been finding ways to adjust to the situation as best we can. And one area that shouldn’t be overlooked is our finances. You may be wondering about the best ways to save money during the coronavirus pandemic.
Though this is an unprecedented event in our lifetimes, many of us are learning to live with our new normal. We may begin to feel like coronavirus isn’t the only thing happening in the world anymore. Whatever changes the pandemic may have brought to our lives, the financial impact shouldn’t be ignored.
If your finances are feeling a hit from coronavirus, it’s important to take action and make a plan. As you look toward the future, consider these tips for budgeting and saving money during coronavirus and the new normal.
Take a Financial Inventory
The new normal. Before you can make your plan to save money, you must define what the new normal looks like for you. It’s going to be a bit different for everyone.
In the past few months, many places throughout the U.S. have moved through different sets of restrictions or phases. Maybe you were under a lockdown or quarantine. Now, businesses are reopening with specific health and safety guidelines, often requiring clients to wear masks and remain physically distant.
Outside of these public scenarios, consider what your life specifically looks like now. Are you working from home, as many people are? Were you or a family member furloughed or laid off? Are you receiving unemployment benefits? If so, how long will that last? What’s your health care/health insurance status?
By asking yourself these questions, you can begin to take a financial inventory of your past and current situation. At the same time, it can help you to roadmap the next several months ahead as you plan ahead and evaluate your needs during that time.
Create a New Budget
Americans are no strangers to budgeting. According to a Debt.com poll, more Americans are budgeting than ever before — 80% in early 2020, compared to 70% in previous years.
But due to the exceptional nature of the coronavirus pandemic, it’s likely that your budget needs to change as a result. Taking your personal financial inventory into consideration, you can and probably should create a new budget.
This is especially important if you’re facing a change in income. But even if that’s not the case for you right now, your shopping, spending and saving habits have likely changed drastically compared to before the pandemic.
If you’re not exactly sure how to find those trends, try these steps for analyzing your financial habits:
- Print out copies of your bank statements from the past several months
- Use highlighters to categorize your spending -- food, rent/bills, entertainment, etc.
- Compare to your prior budget to see how these habits line up
One other benefit of creating a new budget? By matching it to your current situation, it can help you set realistic goals and keep you from being too hard on yourself. If you’re trying — and maybe failing — to meet your budget goals from pre-pandemic times, it may cause additional stress or a feeling of inadequacy. It’s important to be kind to yourself and remember that you’re doing the best you can during tough times.
Explore New Ways to Save
As you look at creating your new budget, you may discover new opportunities to save money as direct results of the pandemic. You may find that you’re able to scale back on spending in certain areas and redirect that money toward more urgent expenses such as rent or utilities.
Maybe your weekly movie theater date with your partner or your kids is on hiatus. Or you aren’t able to use your gym membership right now. Or maybe, since you’re working from home, you aren’t driving 60 miles round-trip to the office and filling up your gas tank once a week anymore.
These savings are somewhat automatic. And it may be helpful to put at least some of this money toward developing an emergency fund -- or a “peace of mind” account -- if you’re able to cover other expenses.
As the next few months bring changes and potentially more freedom to go to the movies, the gym or the office, continue evaluating the impact these expenses have on your financial situation. You may find that you’re happier with your new normal than you expected, and continuing to cut back on spending might be worth the financial benefit.
And don’t forget there’s another way you can save money automatically. With Academy Bank’s Saving Cents feature, it’s easy to set up automatic transfers to your savings account. Here’s how it works:
- Choose - Choose how much you'd like to round up your debit card purchases from your checking account. Options range from the nearest $1 to $5 increment.
- Save - Every time you make a purchase, we’ll round it up. Each night all the extra change is transferred automatically from your checking account to your savings account.
- Track - We keep track of Saving Cents transfers and place that information right on your bank statement each month.
Your Partner in Financial Solutions
During the uncertainty of the coronavirus pandemic and beyond, Academy Bank is working hard to be your partner for all your banking needs.
With Academy Bank, you can bank from the safety of your home, phone or car using our convenient, easy-access options.
We’re here for you.