But these same financial gurus rarely go into detail about how you should spend that money when the need arrives.
And unfortunately, for many of us, that need has either arisen or appears imminent.
If you’re among the millions of individuals impacted by the current epidemic, here are some practical tips to help you make the most of your emergency budget.
Prioritize spending
Stretch your current emergency savings by eliminating every unnecessary item from your budget. Sit down as a family and discuss what is mandatory to keep and what can be discarded.
Focus on your basic needs; food, shelter, and utilities.
Talk with your creditors, if necessary, to see if you can reduce or adjust your repayment plan. Currently, many banks are offering financial hardship programs designed to help people who are affected by the Covid-19 epidemic.
Freeze your debt reduction plan
If you’re working towards paying off your debt, stick with paying the minimums…at least until you can see how long your situation will last.
Yes, it will put you behind your debt reduction goals, but it will free up money that you may need for basic necessities. Once the emergency has passed, you can get right back to paying down your debt.
Move money around
If you’re paying money into a college fund, stop contributing to it for right now and use that money to add to your emergency savings or current emergency budget.
Stop (or pause) monthly subscriptions
For example, if you’re paying a month to month cell phone bill and you can get by just using your home phone, see if you can either scale back your service or suspend it altogether.
And it goes without saying that you can get by for a while without cable television as well as streaming services such Netflix or Hulu.
Rent movies from your local library or even better, pull out those board (or video) games and enjoy family game night again.
Reduce your “fixed” expenses
Lower your utility bills through reducing their use. For example, reduce “energy vampires” by unplugging unused appliances. Run heavy energy use appliances such as your dryer at non-peak times. Turn off the lights, take showers instead of baths, etc.
If alternatives are available, shop around for better deals on most anything such as home and/or auto insurance, internet and/or cell phone coverage.
Curb miscellaneous spending
This category of spending can often be a black hole from which nothing returns.
Eliminate miscellaneous spending from your budget for a while by budgeting every expenditure. Make a shopping list and take it with you every time you go out.
Reduce your grocery budget
Simple things such as shopping store brands and using coupons where possible can be a good start.
Cook simple meals, and stock up on non-perishable items such as dried beans, rice, and canned goods.
Get help, if needed
Finally, after making every adjustment you can, seek out help if needed. Aside from creditor and government assistance, there are non-profit groups providing both financial and physical help to struggling families and individuals.
