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Budgeting During a Crisis

Most financial advisors will recommend that you have an emergency fund of at least 3 months of expenses in case of financial crisis. For many Americans with growing debt loads it is a struggle to save when you are living check to check. So, what is one to do when faced with a crisis with little to no savings?

First things first, to evaluate and create an emergency budget, you need to figure out what your income is. You can do this by looking at your paystubs and/or benefit award letters, or by pulling up your bank statements and reviewing your deposits and adding them up for the month.

Next would be figuring out how much your necessary expenses are; mortgage, rent, any auto payments or insurance, utilities. When was the last time you shopped around for insurance? You may be able to get a lower rate with a new company or if you bundle your car insurance with homeowner’s or renter’s insurance. You may also be able to save on your cellphone plan or utility bills. Try calling your provider to adjust your data plan or ask if they have any discounts.

While you have your bank statements up, it’s a good idea to review for unnecessary spending. If you have credit cards you should pull up your statements as well. Check for any recurring subscriptions you have such as streaming services, memberships, etc. Do you use all these things that you’ve been paying for? Those monthly fees can add up quickly when you have multiple services.

Another place to check is your spending on food and groceries. Takeout and delivery fees can add up and cost a lot more than cooking at home. Try to plan out meals for the week, shop with a list, and try to stick to pantry staples that can be used in more than one recipe to keep costs low.