The pandemic has been a huge eye-opener for a lot of people and with the budgeting challenges it brought with it, financial management was a lot tougher.
If personal finance was already tough pre-pandemic, the health crisis made it a lot more difficult to do. With several industries taking a hit and people losing their jobs left and right, money was a serious issue next to healthcare. While a lot of people are getting sick and getting admitted to hospitals, many Americans were losing their jobs as well.
According to Pew Research, about 25% said they or someone they know lost a job due to the pandemic. That means about 1 in every 4 people had a very difficult time managing their finances because they were let go from work. More than just worrying about their health and safety, they were also worried if they would be able to make their next payment.
Many Americans had budgeting challenges
It has been a challenging year financially for a lot of people for various reasons. Here are some of the most common challenges people had to go through.
Getting laid off
Since the pandemic began, a lot of people have started working from home. But not everyone was fortunate to have that set-up. For one, not all types of jobs can be done at home. Especially the blue-collar jobs and other service jobs. Office-type jobs are best suited for a work-from-home set up especially if you are able to accomplish a majority of your tasks on your desk.
But not everyone works in the office. A lot of people drive for a living, work in restaurants, or work in the field. They are the ones who lost their jobs during the height of the pandemic. These jobs closed down so fast when the pandemic hit. Getting laid off means no steady source of income for you and your whole family.
Getting behind on payments
The next thing that could happen when you are laid off from your job is getting behind payments. Even for the most basic needs, you can run into problems. Rent or mortgage payment is one of them. It is difficult to pay for the house especially since this is normally the biggest expense on your budget every month.
You might start to charge all your needs on your credit card especially when you do not have any emergency fund under your name. Once you do this, the bill will keep on piling up every month until you get a regular job. Until then, this will become one of your budgeting challenges since you cannot pay back your card lender.
The pandemic challenged the health industry because of the novel coronavirus. Since it is a new virus, the healthcare industry was at a loss the first time it came and swept through the nation. Though the doctors now have a good grasp on how to manage the virus, people are still getting sick and if you do contract the virus, it can add financial strain to your budget.
What to do?
Now that you have an idea of what budgeting challenges you would experience during this pandemic, here are some of the things you can do to help get out and improve your finances.
When you are faced with budgeting challenges, your budget will go under a microscope. You need to make sure that you know every detail like the back of your hand. Once you do that, you can now start adjusting it to get to a bare-bones level. This is not ideal but when you are going through a tough financial time, it is something that needs to be done.
This means that you have to bring your expenses to their bare minimum so you can make ends meet. If it is not a need, think if you can scratch it off your list. Some people even take out any expense if it does not keep the lights on, put food on the table, clothes on their back, and a roof over their heads. Tough times call for extreme measures.
A steady income is always a welcome development when trying to budget during this pandemic. This is actually one of the leading causes why a lot of Americans had budgeting challenges in the past year. But one thing you can also do is look for supplemental income. This is a challenge for most people simply because they do not know where to look.
That sounds easier said than done but supplemental income can come from that one thing you love doing – your hobbies. Most people refer to this as income-positive hobbies because they get to earn extra money while doing something they love. If you love to paint, you can sell your painting online. If cooking is your hobby, why not join weekend markets and offer your specialty to people?
You can also pick up a few hours of online work at night in the comfort of your home. You can take up writing or editing tasks for some online content for companies. Reviewing books online if you love reading is a great option. If you love sports, you can maybe start up a blog and help those who are just starting up in your field to understand and appreciate the sport. The more views and followers you have, the more you can earn.
Ask for help
If you are having a tough time with your finances to the point that it is already giving you so much stress, it might be time to reach out and ask for help. This is not a sign of weakness. In fact, a lot of people believe that you need to be brave to ask for help. There are a lot of reasons why you might want to hold off asking for help during the pandemic.
The most common reason is that you don’t know who to approach for help. There is a good chance that your family will always have your back. Or at least, some friends close to you would not hesitate to lend a helping hand. There are also a number of financial institutions ready to help you with free pieces of financial advice and even financial products to help you recover. Just remember that the first step is to ask.
This is easily one of the most overlooked repayment options people have when having financial problems. As the name suggests, it basically helps you consolidate or combine most, if not all of your debt obligations under one account. It might sound like getting everything from one pocket and putting them in another but it does have a lot of benefits.
First, you simplicity in payment where you only need to focus on one account. This means one due date, one interest rate, and one payment amount. There are times also when you get to pay less every month when you consolidate your debt. Just like when you get to use a 0% interest rate card in consolidating credit card debt.
There are a lot of budgeting challenges people had to go through during the pandemic but there are things you can do to manage it. The important thing is to not give up and consistently find ways to improve your finances.