5 Ways to Revise Your Budget During a Financial Setback


 

When you experience a financial setback like a job loss, unexpected health costs or an urgent home repair, it’s easy to feel overwhelmed. One way to help yourself get back on your feet is to take charge of your budget.

Identifying areas where you can make spending cuts, and then changing your budget accordingly, can help you save money and feel more secure no matter what life throws your way. To help, here are five common spending areas and ideas for reducing expenses.

Exploring his emergency fund budget during a financial emergency.

1. Transportation
Between gas, monthly payments, registration, maintenance, insurance and repairs, owning a car can eat a lot of your monthly budget. If a financial setback requires you to make big changes to stay afloat, consider forgoing a car in favor of public transit. If you have more than one vehicle, think about selling one and keeping the other for getting around. All will help free up dollars in your wallet each month.

2. Entertainment
You can still have fun without breaking the bank! Stream a movie, invite friends to join you in an online game or go on a hike. If the need for social distancing has decreased, look for free events in your area. This can help you save money while still enjoying your town. Local newspapers and Facebook groups are two places to find free and low-cost entertainment options.

3. Food
Ordering takeout regularly can really add up. Instead of getting delivery, focus on making your food at home. Buying in bulk from warehouse stores can help you save money, as can shopping deals at your local grocery store. Just be mindful of how much you actually need, and be sure you’re prioritizing needs over wants.

4. Student Loans
If you have student loans to pay, you may be able to give your wallet a break with deferment or forbearance. Contact your student loan servicer to learn more about those options. Refinancing your student loans may also help you cut down your monthly payments.

5. Childcare
If you’re a parent, there may be several areas where you can cut your spending. Buying clothes and toys secondhand can lower your expenses and help you be eco-friendly. If your child is in daycare, look into facilities that provide service on a sliding-fee scale, which means that their charges vary depending on your income.

 

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