By Baruch Silvermann
Regardless of where you live or what industry you work in, you’re probably feeling the effects of the coronavirus crisis. The spread of COVID-19 has caused much more than just health problems—it’s also affecting the way our economy works. In order to protect people from the virus, many businesses have come to a halt. In many places, all non-essential businesses have been forced to close.
As a reaction, global markets have fallen on a sharp downward trajectory since February, when the virus started to spread. At the end of April, the Dow Jones was down 15.1% since the start of the outbreak, and that’s after hitting rock bottom in mid-March.
This means that day-to-day life for workers has changed dramatically in the span of just a few weeks. For those who work in food, hospitality, or retail, this can mean an indefinite layoff, or at the very least, a loss of work hours. The economic impact is so widespread that even office workers outside of affected industries may be experiencing temporary layoffs due to lost revenue. Freelance and gig workers also have been heavily impacted as many companies don’t have the money to spend on non-essential services.
Simple ways to cut costs during an income gap
If you’re experiencing a loss of income right now, there are things you can do to weather this storm financially. This means looking for new opportunities, as well as changing the way you currently spend money. Here are some steps you can take to get through this time of financial instability.
The first thing to do is look for ways to cut costs. It’s likely that you’re already cutting back on your spending anyway, since you won’t be going out to eat or shop as much. However, there are plenty of other expenses you can reassess to cut back on spending. For example, now is a great time to look at your transportation costs. You may want to consider temporarily cancelling your auto insurance if you won’t be driving, or even switching from a car to a bike.
Another way to cut costs is to reassess the way you eat and drink. If you normally stick to prepared foods, now might be the right time to master a few basic recipes. Although many restaurants offer takeout, try to resist the temptation and cook at home instead. Look at your other expenses—which ones are truly necessary and which ones can easily be replaced? Clothing, fitness, and entertainment are all areas to look at when cutting back.
Once you’ve decided where to cut costs, write down a temporary budget for the next few months. Start by writing down your non-negotiable expenses, such as rent, groceries, and utilities. Then add the amount of money you’ll have coming in during this time, if any. Once you have everything on paper, you’ll be able to determine how much you can spend, or if you’re running at a deficit, how much money you’ll need to make.
Boost your cash flow during coronavirus
There are a number of ways you can supplement your income during this time, so that you still have money coming in. If you have savings or an emergency fund set up, now is the time to use it. However, try not to deplete your savings right away; keep in mind that right now we don’t know how long the COVID-19 crisis will last or what sort of financial challenges you may be facing in the future.
Published at Sat, 16 May 2020 15:33:48 +0000