As the health crisis continues to grip the nation and the whole world, a lot of people are trying to survive with a bare-bones budget. With a lot of businesses trying to survive, cost-cutting measures meant putting employees on furlough. For some, they needed to let go of some people pushing unemployment numbers to rise.
The Bureau of Labor Statistics shared that the unemployment rate went down to 11.1% in June this year. Though this has been a decline, there are still a lot of people who are having a financially challenging time. From reduced hours at work to being put in furlough or being let go entirely, the pandemic has made it a lot more difficult to manage personal finances.
On top of this, it might be some time before things go back to normal. This means a lot of people would rely on a bare-bones budget to get through their finances. This is for those who are trying to stay on top of their expenses and payments trying to financially live on the edge. For those who are having a hard time before the pandemic, this crisis is proving to be a tough time.
With the $600 unemployment boost coming to an end, the amount people relying on unemployment benefits will drastically go down. What was already a difficult situation in the past now becomes a lot more challenging. A lot of people would have to cut their budget to the core. One thing to focus on is that it is difficult but not an impossible task.
Face your numbers
Coming down to a bare-bones budget requires you to meticulously assess your situation. The one financial tool you will need is your budget. A lot of your financial decisions moving forward will be based on your budget. That being said, you need to make sure that you have a comprehensive household budget.
When the $600 unemployment boost stops coming, it will be tough for a lot of people. The priority now boils down to immediate needs. If the expense does not keep the lights on at home, pay for the roof over your head, or even put food on your table then you better re-think that item. You have to look at your bare essentials first.
You can also consider expenses for medicine or those that help you earn during this trying time. It can be paying for internet connection and other software expenses you need to continue working on a side gig. Remember that bare essential expenses for one household can vary from what you consider as core expenses at this time.
Double down in reducing your expenses
Coming up with a bare-bones budget means you take a closes hard look at your expenses. If you were able to cut out some of the easy items in the past, you now have to go deeper. This seems like a tough task or even impossible for some areas in your budget. The idea is to keep going back to your objective of stripping down expenses to the core.
After the $600 unemployment boost comes to an end, it will be tough to even cover some of the basic needs in your budget. CNBC shares that over 5 million Americans will have a difficult time covering basic expenses without the $600 boost. This means people might start coming up short with their food budget for the family.
Stripping expenses down to bar minimum can mean eliminating take-out and food delivery for the meantime. It can also help if you try to cook from scratch. Buy the ingredients and prepare meals in advance. Look for meals with common ingredients so you can buy those in bulk when you go out You save money with your grocery bill and save time from having to go out often.
Putting together a bare-bones budget includes talking to your lenders
If you know that you will have a difficult time meeting all your payments, it is a sign that you need to start reaching out to lenders. This is not the case of asking for forgiveness later when you start missing your payment due dates. You need to be proactive and talk to them to let them know of your situation and to try and find a way around it.
There are lenders who have already taken the initiative of offering repayment programs for their customers. The goal is to help them restructure their payments through different means. Consumer Financial Protection Bureau shares that this can range from lowering monthly payment, waiving late fees, or even reducing interest rates.
This is the reason why you need to reach out and talk to your lenders as soon as possible. They might have programs you do not know about. These can help you get through a tough financial time. If not, it helps that they know about your current situation. With this, they might be able to look for ways to help you manage your payments. Remember that it will also benefit them that you make small regular payments than defaulting on your debt.
Identify opportunities to bring in money
One of the things that can help you manage a bare-bones budget is exhausting efforts to find a side gig. What you find might not be connected with your previous job but you cannot think about that now. It may not be ideal but every little bit of income helps at the moment. The extra money you bring in every month can help bring food on the table.
You can start with businesses in your community. Some of them might need help on certain days of the week. Maybe when inventory comes in or when deliveries need to be made, you can come in to help. If you know people who need to report for work at this time, you can offer to look after their children or even tutor them for school.
Do not forget that there are industries and businesses still looking to hire people. Put in the time and effort to look for these businesses and send in your application. The pay and hours might be different from what you were used to before. But at this point, the need to bring in any amount into your budget should be on top of mind.
Keep a positive frame of mind
One of the toughest battles you could be facing at this time apart from your finances is your mental health. It is stressful to try and keep your finances in order. The reduction in unemployment benefits can push you over the edge but you have to hang in there. Focus on the income you can raise every month and the expenses on hand.
Bare-bones budget is essentially stripping down your budget to the core and sticking to what is important. You start doing away with the expenses that have nothing to do with your basic needs. It will be a tough decision but you need to do it to make ends meet. Securing other sources of income will also be challenging at this time with everyone else trying to do the same thing. You just need to keep trying because it will be a lot harder if you start to give up.