When facing a financial crisis, having a handle on your cash flow is key to your financial survival and for rebuilding in the future. Budgeting in a crisis requires knowing your priorities and limiting expenses. The most important costs to take care of are housing, groceries and debt.
Housing
The first line item in your budget should be housing. Regardless of what is happening in the world around you, ensure you have a roof over head. If you are unable to make your housing payment during the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic Security Act, includes foreclosure moratorium and forbearance for mortgages as well as eviction protection for renters. To learn about these protections, contact your mortgage or rental company. When this crisis is over, get current on your mortgage or rental payments to avoid fees or negative impacts on your credit score. If you are renting and want to purchase a home after the crisis, consider attending a homeownership workshop, like those lead by CCCSMD, to identify budget changes to get ready.
Groceries
During a crisis, it is important to be frugal with groceries. For the largest savings, stick to the store brands, limit meat purchases, and stick to essentials. If you cannot afford groceries, seek out local food banks and community organizations that are providing free groceries during this pandemic.
Debt
To give your budget breathing room, do not pay more than the minimum payments. If you are struggling to make payments after taking care of your housing and groceries, contact your creditors to learn about forbearance and temporary relief programs.
Limit everything else on your budget to the greatest extent possible. Identifying expenses to reduce will help you feel in control during unsteady times. For help getting through a crisis, seek guidance from a not-for-profit credit counseling service such as CCCSMD who can help you manage your budget and navigate the relief options for your financial obligations.