Building a budget is tough under the best of circumstances. Having to adjust your well-researched budget as a result of the financial impact of a global pandemic and subsequent recession is incredibly difficult. Yet, millions of professionals find themselves in need of a new budget ASAP. Indeed, “normal” spending habits and income have been disrupted and may not resume for months –– or even years –– into the future. As such, it’s imperative for everyone to review their standing and form a new working budget moving forward. This post will help you do just that:
Reassess Income Sources
For a huge portion of people, their regular income dictates how they spend and budget money. If you have a “traditional” nine-to-five job, odds are you generate most –– if not all –– of your income from your paycheck. Obviously, over 30 million Americans have already been laid off. Millions more have seen their hours cut. Though it may be difficult, it’s important to figure out how much income you can expect to generate over the next few months. Study patterns in your industry and assess your situation. Freelancers and gig workers will likely find it even more difficult to determine their income figures, but it is crucial to calculate some sort of accurate income baseline in order to budget effectively.
Reconsider Purchases & Investments
Just as you should monitor your income sources, you should also review how you spend your money. You may need to curtail certain regular purchases or differ payments if possible. However, make sure not to cut any essential investments. For instance, if you’re planning on moving to a new country when the lockdown ends, it’s worth retaining the services of a business immigration lawyer. You still have to spend money to make money. So don’t cut out essential purchases or investments that provide serious value in the long-run for short-term gains now.
It’s never been easier to spend time browsing ecommerce stores. After all, people are spending more and more time on their electronic devices because of the lockdown. Given that fact, professionals need to resist the temptation to make impulsive purchases online. These sort of purchases can have a significant, negative impact on your ability to stick to a budget.
Remember this rule of thumb when it comes to making financial projections: hope for the best and prepare for the worst. The truth is, no one knows what the next six months will look like. That’s why developing contingency plans is so beneficial. You should be prepared for every eventuality –– from filing for bankruptcy to rapidly expanding your business. Preparation now is the key to success later.