Four tips to adapt your budget in times of crisis
In a context where your income and expenses have suddenly changed, it is possible that a review of your personal finances is necessary. For some, revisiting your financial priorities may mean putting projects that are important to them on hiatus, which is not always easy.
First and foremost, if you have not already made a budget, it is advisable to establish one to have an overview of your income and expenses. Here are some tips for creating or adapting your budget for unforeseen situations:
1. Calculate your income
When an unforeseen situation arises, your cash flow may have diminished or even disappeared following a job loss. The first thing is to check if your income is equal to your expenses.
Remember to budget all of your cash inflows, including special provincial and federal government programs during this time.
2. Limit your spending
Before being in the red, you need to update your spending based on your new reality. While some expenses are already reduced (transportation, childcare costs, purchase of clothing, leisure, outings, restaurants, travel, etc.), others can be added. It is recommended to prioritize spending according to priorities and to anticipate those that could increase.
3. Use your savings
If you are forced to use your savings, here are some ways to put them to good use:
Use your emergency fund, if you have one.
Transfer money set aside for projects that you can carry forward to your checking account.
Choose to withdraw money from your savings before investing in the stock market, which may have been less valuable in recent weeks. In the long term, the markets are likely to pick up again. Patience is often a good advisor.
As a last resort, dip into your savings. If you must do so, focus on those that have not suffered a decline in value over the past few weeks and consider investing in your TFSA over those in your RRSP, since withdrawals will be tax-free. Withdrawing your savings could impact your longer-term goals. Before considering this option, aim to reduce your expenses.
4. Follow up
Making a budget is good, but it must still be respected, especially in times of crisis. The accuracy of your budget is an important key that will determine its usefulness and relevance. An easy way to make sure your budget is up to date is to schedule regular updates on your calendar. Pick a time that is right for you: Sunday with morning coffee, Monday to get you off to a good start during the week, or even the day you used to receive your pay.
إرسال تعليق