5 Ways to Manage Your Finances During an Uncertain Time

We know that managing your finances can be particularly stressful during these rather uncertain times. It seems like things could change at any given moment and we all want to be prepared. Here are a few ways to manage your finances when times are uncertain.

  • Conserve Cash

The first and most important, rule to follow in uncertain times is to conserve cash! You should minimize your spending as much as possible and keep as much money in the bank as possible!  It seems like obvious advice, but sometimes a crisis can cause people to panic.  Don’t rush to pay as many bills as possible!  Stop and think about how long you can make your current cash last if you pay only what is absolutely essential.  Make a list of bills that are priorities and those you can hold off on paying or negotiate down. 

  • Reduce Expenses

This step is also key in navigating uncertain times.  There are a few key ways to manage your finances and go about getting your expenses in line when you need to cut back.  

  • Cancel subscriptions
  • Cut debt payments to the minimum
  • Implement a strict weekly budget for variable expenses

Having cash on hand is key, but the best way to keep cash on hand is to not spend it.  By establishing rules and implementing no spend days, you should be able to make your cash last and minimize the amount of new debt you incur. 

  • Negotiate Bills

Many companies offer hardship discounts to people who find themselves in a tough spot financially.  It might require a bit of patience, but calling and asking for assistance can really reduce your monthly expenses and give you the wiggle room you need to get through a rough patch. 

  • Call credit card/debt companies and request a break on interest and/or monthly payments
  • Call cable, cell phone, and utility companies to negotiate lower monthly bills or to set up payment plans

Remember, EVERYTHING is negotiable, or at least you should assume everything is negotiable until you confirm otherwise.  The worst thing that can happen is that the company says no and you need to revisit your budget to add the necessary expenses back in. 

  • Pause Retirement and other Contributions

This is often a hard pill to swallow for people, but it is often a necessary step.  We encourage clients to turn off retirement contributions and to cut contributions to HSAs, FSAs, ESPPs, etc.  This is a quick and easy way to inject extra money into their paychecks when they need it most.

Remember, you can always go back to making these contributions later and make up for lost time, but the benefits of making these contributions are far diminished by the negative impacts of incurring credit card debt or in withdrawing funds from your retirement account. 

  • Tap Into Unused Resources

There is potential for you to utilize resources that can minimize your financial burden.  In some instances, eligibility for utilizing these resources may require you to have a higher credit score, but if you have the ability to access them you should take advantage!

  • Open a balance transfer card and move interest-bearing balances over
  • Open a 0% interest credit card to use in case you don’t have the cash to cover major expenses.  Treat this as a backup card for emergencies if/when you run out of cash!
  • Tap into a HELOC (Home Equity Line of Credit) if you have available equity in your home.  This is a cheap way to quickly access the equity in your home. 
    • You will only be required to pay the interest on the amount borrowed for the first ten years

In order to manage your finances, it’s important to get creative when times are tough! You need to explore every available option and consider utilizing resources and making sacrifices you never considered before.  In a crisis, things can be stressful and overwhelming, make sure you take a step back and evaluate the entire situation before making any rash decisions!  Tough times don’t last forever, being smart now can eliminate financial pain down the road and put you in a better position once the uncertainty passes. 

The Financial Gym is a national, personal financial services company with a fitness-inspired approach. Certified Financial Trainers™ work with clients one-on-one virtually and in physical locations across the country on a regular basis to teach them financial literacy, how to be accountable for their money, and how to make smarter, more strategic decisions about their finances.