Financial Advice

Manage Your Finances

TOPICS

Build Your Budget Back-Up Plan

So many of us have already tightened our belts, but in these uncertain times, some still worry that more financial hardships could be on the horizon. Now is a good time to think ahead and consider how you might approach a back-up plan for your budget, should you have to weather tougher storms. Consider these five steps:

Visit your local branch anytime to chat with a personal financial representative and learn more.
  1. Know your current budget. If you don’t have a written budget, now’s the time to create one. List all of your income and expenses, including seasonal or occasional items (like annual dues, birthday gifts, or seasonal income), and track your spending. Regularly revisit your budget on a predetermined schedule. If your budget feels particularly tight, you might want to revisit it every month or even every pay period to make adjustments as needed.

  2. Define your triggers. What events will be your sign that it is indeed time to make financial changes? Would it be a change in income? An illness or a recovery in the family? A drop in your savings account, or rebuilding your emergency fund to maximum capacity? Would the need to take out a new loan or pay off an old one be your indicator? Make a list of potential triggers, being as specific as you can, and be sure to look at both positive and negative events. Deciding ahead of time what circumstances should jump-start a new budget can alleviate stress when it’s time to take action.

  3. Brainstorm ways you could further trim your budget. Take a look at making incremental changes, like ways to reduce grocery and utility bills, as well as larger changes, like selling a car or downsizing your home. Take a special look at whether recent lifestyle changes make saving easier or harder. For example, if you are now working from home, you might eat out less, drive your car less, or adjust your cell phone or data plan. Estimate any savings or new expenses that will arise from the changes you’ve identified, and prioritize the list based on what’s important to you.

  4. Consider testing some of your ideas before you need to implement them. For example, libraries offer a wealth of virtual services, including eBooks, downloadable audiobooks, e-Learning, streaming entertainment, and online newspapers and magazines. Try exploring everything your library has to offer for a week, or even a month, and then see if those free services can take the place of any of your entertainment expenses like cable or streaming services. Knowing that you like your back-up plan may take the sting out of making the change should you have to later. Or, you might find you want to go ahead and implement that change now.

  5. Position yourself for employment changes. Whether your job feels secure or vulnerable, now is a good time to explore what would position you best for success should you need to look for a new job or want to take on additional work. Update your resume. Network online with colleagues. Sign up for free job sites to learn what type of employment opportunities are out there. Research free and reputable skill-building courses. Work on your business plan if you want to freelance or have a side hustle in mind.

Not knowing what the future may bring is stressful. But knowing your current budget and making a back-up budget plan can help lessen your financial anxiety now, and reduce the stress of having to make financial changes should more difficult times occur.