Making ends meet paycheck-to-paycheck can be stressful in itself. But what happens in times of financial crisis - like a nation-wide pandemic, or an economic recession? Taking a closer look at your finances, and creating an actionable spending plan can help you survive (and recover from) unforeseen financial hardship. 

What to do today

It can be scary not having enough money to cover everyday necessities. However, there are a few things you can do right now to get you through this hardship. 

The first thing you need to do is look at your monthly expense and prioritize - what’s most important? What can wait until your financial situation changes? Rent, groceries, gas, insurance - these should all be top priority. Going out to eat, monthly streaming subscriptions, etc. could be placed on pause until you can cover your basic necessities. Remember, this plan is to help you in the right-now. Once you are steadily making more money again, you can pick these extras back up.  

Think about everything you purchase and ask yourself if it is a must-have or just something that can wait. Also consider where you are shopping - is there somewhere else you can get a better deal? Thinking critically and making smart shopping decisions can also help you be less reliant on using credit cards during this difficult time. You’ll have peace of mind knowing you won’t be paying an interest rate on all your purchases by using your debit card. 

Cut These Costs When Facing Financial Hardship

Use this checklist as a guide to eliminate unnecessary expenses and to create a spending plan 

  • Food
    • You might find it obvious that evenings dining out at fancy restaurants probably aren’t the best idea when experiencing a budget crunch, but think about your groceries too. Consider avoiding the higher-priced stores and stocking up on the basics at the more reasonably priced spots. You might find that cooking at home and taking your lunch to work saves you lots of money and ends up being healthier too.
  • Cable/Movies/Rentals
    • If you’re like most people, your visual entertainment comes from multiple sources. You may watch movies on cable, in the theater, or via a streaming service. In crisis situations, it’s best to focus on watching movies at home and using one particular way to do it. In other words, if you have both Netflix and premium movie channels, it’s probably time to go with one or the other.
  • Phone plans
    • It’s nice to use a smart phone to be able to look up information on the go, but you could probably make do without the data plan if you had to. Did you know that you could also be on a prepaid smart phone plan? Call your service provider to ask them to perform an analysis on which plan is best for you. You might be paying for more than you actually need. Also, consider eliminating your house phone if you still have one.
  • Gym
    • It’s important to get some stress-relieving exercise during this trying time, but there’s no reason why you should have to spend money to do it. Brainstorm ways to be active without having to fork over a big chunk of your paycheck. The main thing is to just get moving!
  • Shopping as entertainment
    • One activity that could put you in the trouble zone is shopping for fun or to ease tension. “I won’t buy anything, I’ll just browse” too often can lead you down the path of unnecessary spending. Eliminate leisure shopping or other activities that put you in temptation.
  • Gas
    • Is it an option to work from home more? Can you carpool or combine your errands into fewer trips? If your family has multiple vehicles, can you sell one and share the remaining?
  • Insurance
    • With the ease of using the Internet to compare rates, the insurance business is much more competitive than it used to be. Shop around for the best deals on any type of insurance you have—auto, home, life, etc. Check into bundling these with one company to save even more. How is your credit score? This might affect the cost of certain insurances.  Also be sure to ask about discounts you might apply for, and the option of raising your deductible in exchange for a lower monthly payment.
  • Utilities
    • Think of ways to stay warm or cool more efficiently. Put on more layers in the colder months and spend more time outside during the warmer times. Be conscious of turning everything off and even unplugging electrical items when you leave a room.
  • Habitual items
    • When you have a comfortable financial situation, it’s easy to buy coffee, cigarettes, alcohol and convenience store snacks without thinking too much about it. But in these tighter times, think about what you are really getting out of these purchases and if there are expenses that are more important.
  • Taxes
    • If you have more money taken out of each of your paychecks than is necessary in order to get a large income tax refund check in the spring, you are over-paying the government each month. Cut this expense by using the IRS withholding calculator to determine the appropriate amount to have withheld from each paycheck.

None of these cost-cutting measures alone is guaranteed to immediately solve all cash flow issues, but together they can potentially save you hundreds of dollars per month.