During these strange times we’re all living in, it’s especially important to be proactive in managing cash flow.
For some, it might be a necessity, as a job loss or reduction in hours requires cutting back. If that’s your situation, contact all of the companies that you have a financial relationship with — your mortgage company, auto loan provider, student loan servicer, credit card companies, and others. Many such companies have made provision for customers in your situation, so see what financial help may be available.
For others, this may be a rare time of opportunity. With so many evening and weekend activities cancelled, you may have more free time than ever. Here are some ideas for using that time profitably.
Review all monthly bills. After noticing an increase in the amount being charged by our cable company, and failing in my attempt to get them to keep our bill as it had been, I did some shopping around. We had been using a traditional cable company for local channels along with Sling TV for sports and other channels. In less than an hour, I found that I could get all the channels we wanted by cancelling the local cable service and Sling TV, and then subscribing to YouTube TV instead. Monthly savings? Over $30.
Even if you haven’t been hit with a rate hike, list all of your monthly bills and see if you could save some money on each one. For example:
- Contact your cell phone and Internet service providers to see if there’s a lower-cost plan that would meet your needs or if they provide a discount for setting up auto-pay.
- Ask your insurance company how much you could save by raising the deductible on your vehicle or homeowner’s insurance (just make sure you have enough in your emergency fund to cover the new higher deductible).
- Reconsider memberships and subscriptions. Do you belong to a health club? Subscribe to a newspaper or magazine? Should you continue?
- With interest rates low, this might even be a good time to refinance your mortgage.
Put savings to good use. Another financial opportunity may be found in all the things you’re not spending money on right now. You’re probably traveling less, eating out less, and going out for entertainment less. You may even be getting refunds for trips or your kids’ extracurricular activities that have been cancelled. Consider how that money could be put to good use. For example:
- Add money to your emergency fund.
- Make extra payments toward your debts.
- Send some extra money to a favorite charity.
Be careful about redirecting spending. With more time on our hands, it can be tempting to spend that time shopping online for things we might not otherwise purchase. If you’re comfortable ordering take-out, for example, don’t get too comfortable with it. Instead, learn some new recipes.
My wife and some of her friends have created a weekly challenge, taking turns naming an ingredient people typically have in their pantry—think tomato paste or a can of beans—that must be used in a meal. They then take pictures of what they made and vote on the best. It has led to some creative, inexpensive meals while providing a fun reason to stay connected.
Build new frugal habits. A common idea for freeing up money for savings or debt reduction is to go on a spending fast. For some, that means spending only on absolute necessities in every spending category. For others, it means trying not to spend any money in specific categories for a certain amount of time, such a three-month entertainment spending fast.
During the coronavirus quarantine, when there are so many things we can’t do, use this time to search for fun free things to do online. Many museums and zoos offer virtual tours: https://www.rd.com/culture/virtual-tours-to-take-for-free/. A number of Christian musicians are performing on Facebook Live events. And quite a few universities offer free online classes.
I’m confident that life will eventually return to normal. Forever after, we’ll remember this experience, perhaps wishing we had used our time better. To avoid that regret, try at least one of the ideas mentioned above. You might just find that it’s a profitable habit you’ll want to stick with long after the pandemic has passed.
Matt Bell is the author of four Biblical money management books published by NavPress. He speaks at churches and conferences throughout the country and writes the MattAboutMoney blog.
This article should not be considered legal, tax, or financial advice. You may wish to consult a tax or financial advisor about your individual financial situation.