There is a certain level of uncertainty floating about, and with it, people begin to think more about the cost of living and saving up money for gray days. As a renter, there are certain bills you are supposed to pay every month, and it’s paramount that you know how to divide your income and keep track of your expenses.
According to a recent study, 90% of Americans say that they will save more money after the Covid-19 pandemic. To help you out during these times, we’ve asked financial experts to share with us the advice they would give to renters on how to best manage their finances during this time and what spending habits to avoid. Here’s what they told us:
Brian Brandow, founder of Debt Discipline
“The entire world is being affected by the COVID19 pandemic. So be aware that you are not in this alone. Job loss and underemployment are affecting many of us. There are some things you can do to help get through this rough period, financially. Review your income and expenses, and only spend on necessities.
Your rent, food, utilities, and medical needs should be the top priority. If you are still struggling to pay these expenses, communication is key. Speak with your landlord, and make sure they are aware of your situation. It’s much better to talk about it than avoiding it and leaving the other party guessing on when they will be paid.
Many major companies are relaxing payment due dates and policies due to the steps being put in place to stop the spread of the pandemic. Take this opportunity to reach out, and let them know where your finances stand. Good luck!”
Brittany & Kelan, founders of The Savvy Couple
“As renters, your biggest concern should be keeping your family safe and taking care of the 4 major bills. Rent, utilities, food and transportation are the most important bills that you need to be paying right now. Keep a roof over your family’s head and food on the table. After those 4 major bills are taken care of, you need to evaluate your current situation and see what bills can be cut.
Gym memberships, eating out, and general spending should all be stopped. Think about what you are currently subscribed to and see if you can pause or cancel those subscriptions like Netflix, Amazon, or Hulu. If they are not considered “essential” you should also see a drop in your monthly gas and fuel budget. This money would be great to help with extra food to eat at home or money to put toward an emergency fund.”
Eric Roberge, CFP and founder of Beyond Your Hammock
“Renters can best manage their finances by focusing on what they can control. None of us can control what happens to the market or the economy, but we CAN control how we use our own personal finances. If you’re concerned right now, focus on limiting your expenses and cutting back on discretionary spending (that includes expenses that are “wants,” not “needs”).
Focus on buying only what you need and don’t let what you do have go to waste. If you get refunds from canceled trips or plans, consider putting that money directly into your savings account in case you need it down the road for emergencies.
Also, be careful not to overextend yourself at this time. There’s a lot of uncertainty right now and we don’t know how long this current situation will last or exactly what the long-term fallout will look like. Now may not be the best time to jump into any big financial commitments or make massive changes. This includes how much support you offer to others.
If you can, supporting your local businesses, workers, and neighbors is a wonderful thing, but if you’re already financially strapped, look for other ways you can help. Can you run errands or shop for groceries for elderly neighbors? Can you volunteer to bring lunches to hospital workers? There are more ways to help than spending money you may not have, so look to contribute in non-financial ways if you’re stressed about your own ability to get through this tough time.”
Jackie, founder of Jackie Beck
“While everyone who can is social distancing right now, we’re each still experiencing this emergency in a different way. Some are on the front lines, in hospitals and grocery stores. Some are working from home, and spending less on transit. Others have lost their jobs and are trying to navigate applying for unemployment.
No one knows how long this will last, or what the wider financial and health implications will be. So when things are uncertain, it’s good to prepare as much as possible for a long-term emergency.
That means cutting back on spending where you can (for example, by putting unused memberships on hold) and using the savings to add to or start an emergency fund. When you do spend, prioritize what’s most important: food, housing, and healthcare. If there’s extra work you can do from home while still juggling this new kind of life, consider doing that as well.
If you’re unemployed or making less than usual, apply for any benefits you may be eligible for. Don’t assume you won’t qualify, since many things have changed due to the new CARES Act. Talk to your creditors if you can’t pay your bills or need to make payment arrangements.”
Kiersten Saunders, co-founder of Rich & Regular
“If you currently have debt, avoid anything that would negatively impact your credit score and, in turn, make it harder for you to find new housing. In times like this, it can be easy to get caught up into short-term thinking, but it’s important to recognize that your credit worthiness (as deemed by your credit score) is indicative of how you manage your finances over time.
That said, don’t be afraid to pick up the phone and ask for advice. The CARES Act has some provisions for debt relief and assistance, should you need it. If the reason is Corona-related, delinquencies and deferrals would not trigger adverse credit reporting, but it has to be agreed upon with the creditor. That means you have to talk to someone. Yes, it’s going to be a long wait. Yes, it may be frustrating. But in situations like this, it’s worth it.
Lastly, bulk up your emergency fund by assuming your “worst case scenario” includes being displaced. If your emergency fund is based on several months of normal expenses, you should include a cash cushion for higher upfront costs associated with moving. Layoffs and decreases in income are on the rise and with that, future landlords may request a heftier security deposit or more upfront rent to account for the volatility.”
Vicki & Amy, co-founders of Women Who Money
“First of all, take a deep breath and resist the urge to judge your past money moves. Instead, focus your energy and make a plan to avoid taking on a lot of high-interest debt during the next few months. Dig into your finances to slow the flow of money out of your accounts.
Review your recent credit card and bank statements, write out your monthly expenses, and flag your discretionary spending. Create an emergency budget that provides for your needs — housing, food, utilities, and health care, and postpone spending on wants until the crisis is over.”
We hope this article helped you out and you feel more prepared for this period. Stay safe!