All of our lives have been shaken recently- and we are living in some very unusual circumstances that we are not used to. Many people are experiencing financial uncertainty- myself included! Unfortunately, financial uncertainty can lead to financial anxiety and additional pressure to make ends meet. Not fun.
How can we ease this financial anxiety?
If you have experienced financial losses, it’s important not to panic. You are in control of your finances, and you can help the situation by sticking to a tight budget. Your future self will thank you for this.
How to create a budget plan
If you don’t already have a budget plan in place, now is the time to create one. First, write down all of your fixed expenses. Next, review the money which is left over after your fixed expenses, and allocate this to different categories like savings, groceries, entertainment and shopping.
If you already use a budget, adjust your budget so that it is in line with your new circumstances. Perhaps you want to save more money, and spend less on shopping- write it all down in your budget and adjust your spending accordingly.
What are the best budgeting methods to use?
There are several different budgeting methods that you could use to help you during this time. Popular methods include the 50 30 20 method- which suggests that you spend 50% of your income on needs, 30% on wants, and 20% on savings. However, this is not very in depth and you might find that you need additional structure when you are attempting to stick to a tight budget.
Instead, you can create a more in depth budget plan using a budget planning calculator like this great family budget planner from calculator.me. This is an excellent tool which you can use to break down your spending into more extensive categories.
This planner is particularly interesting as it is based on the methods of the popular personal finance guru Dave Ramsey. The planner takes into account transport, medical, recreational spending and more. Breaking down your spending into smaller, more manageable categories will help you to see where you can cut back, and where you could put some extra money into your savings instead.
What else can you cut out from your budget?
If you’re really worried about your financial situation, you could try living frugally during this period of time so that your living costs are reduced. Frugal living means something different to everyone, but it mainly encompasses spending less (or nothing at all) on new clothes, takeaways and other non-essentials.
Living frugally for a period of time usually means that you are only spending money on the essentials. You might downgrade the brands you buy at the supermarket, purchase anything else you need second hand, and save the rest of your money for a rainy day.
Sticking to a tight budget isn’t easy, but using budget planners and calculators, and living more frugally certainly make it feel more manageable. If you’re worried about money, try out these methods and see if you can change your lifestyle to accommodate a tighter budget.