How to Cut Your Expenses and Shore Up Your Finances

28 Jul

The end of the extra $600 per week unemployment benefit will happen this week if Congress doesn’t manage to pass an extension and that could be a huge problem for many families.

Over the last few months, Americans who qualify for unemployment insurance have received an extra $600 a week in federal assistance on top of their normal unemployment benefits. This is slated to end on the last day of July. 

While Congress is currently working on an extension of this program, there is a very good chance that the extra benefits will be sharply reduced in the future and that workers will experience an interruption in benefits as it is unlikely Congress will manage to pass their bill before the extra benefits expire.

Experts advise those who are currently struggling financially to take some steps to prepare their household finances for the coming shock. Here are a few tips on how to cut your expenses and shore up your finances:

Cut Every Expense You Can

When money is tight you have to ruthless about cutting expenses. You should be cutting out everything that isn’t a necessity. Streaming services and gym memberships are a good place to start. Can you move to a less expensive cable plan or downgrade your internet if necessary? 

Review your credit card statements looking for recurring expenses that pop up. These many be small purchases such as a morning muffin or coffee. Can you comfortably eliminate some of these frequent purchases? 

It often pays to look at your grocery budget as well. Is there food you are buying that is going to waste or would it make more financial sense to make some meals from scratch and cut out some prepared foods. Are you getting takeout or delivery on a regular basis, can that be scaled back?

It’s also time to start getting serious about turning off lights, limiting shower times as well as how many loads of laundry you are doing. It’s important to remember that every little bit helps so shaving a $10 off each of your utility bills can add up. 

Keep Your Receipts and Have a Budget

Small cash purchases can easily be overlooked when budgeting. These expenses tend to add up so making sure you are counting all of your expenses is key. Save all of your receipts from cash purchases and make sure you put them into your budget. 

Keep a budget and refer to it often to make sure you are staying on track with expenses and cut back on any that you can. Keep a log of your daily cash purchases and make an effort to reduce those costs. 

Look for Hardship Programs

Many utilities, banks and even insurance companies are working with their customers who are experiencing financial hardship during the pandemic. If the loss of the extra unemployment insurance is going to hit you hard, now may be the time to tap some of these hardship programs.

Call every creditor you have and ask about any hardship programs they may have to help you weather the financial crisis. This can be a fairly long list:

  • Landlord
  • Mortgage lender
  • Utilities 
  • Credit cards
  • Internet provider
  • Cell phone carriers
  • Cable
  • Water
  • Gas 
  • Garbage

While many of them may have formal plans in place to help their customers, other may not. Ask if there is anything they can do to help, try to negotiate your payments down or even delay payments until you are on more stable financial footing. This is also a good time to lower your bills by reducing services. Can you cut your data usage down or move to a lower cable package or even cut cable entirely?

Talk to Your Insurer

While insurance is expensive and can be a strain on your budget, it is an absolute necessity and can be a financial lifesaver if you have an issue involving your car, house or health. Here are a few tips on how to lower your insurance costs during this difficult time:

Car insurance: Many car insurance companies have been lowering premiums as drivers are not on the road as often during the pandemic. If your insurer has not lowered your rates, give them a call to see what they can do. Also ask about forbearance and any other payment programs they offer for hardship. If they are unable to help, consider shopping your coverage.

Health Insurance: If you have been laid off and lost your health care you have a couple of choices. While everyone being laid off must be offered Consolidated Omnibus Budget Reconciliation Act (COBRA), this can be an expensive choice. While this keeps your current coverage in place, you are paying the entire premium yourself and it is often expensive. 

Consider shopping for a policy on your state health insurance marketplace. If you lost your job you are qualified for a special enrollment period on the exchanges. These policies tend to be less expensive than COBRA. 

Homeowners Insurance: There are a couple of ways to lower your homeowners insurance premium and one of the best is to up your deductible. If you can afford to double your deductible, you should see a drop in your rates. However, always choose a deductible that you can afford in the event you have to make a claim on your policy. 

Discounts are another way to save. Call your agent and have them do a discount review to make sure you are receiving every discount you are entitled to receive. Even small discounts, such as paperless policies can add up. 

Look for Free Programs

It is often possible to cut down on your entertainment budget by utilizing free resources in your community.  Cut out Netflix or cable and look for free books, movies and magazines at your local library. Dumping cable and streaming services can result in significant savings. 

If your community has a food bank and you qualify consider visiting to help save money on your grocery bills. 

Find Ways to Bring in Some Money

While cutting your expenses is a great way to shore up your finances, it may not be enough. You may need to find ways to bring money into your household. Here are a few ideas on how to generate a little cash:

  • Let People Know: You can post on local sites like Nextdoor and Craigslist looking for work and letting people know you are available for jobs they may need done. Highlight your skills and suggest jobs that you would be best suited for. 
  • Consider a Side Hustle: There are always side hustle jobs available. Consider signing up with Uber, Lyft Postmates or any of the other companies that make earning a bit of money on the side possible. Make sure these jobs don’t cause issues with your unemployment insurance eligibility. 
  • Small Jobs: Keep an eye out for jobs such as yard cleanup, moving help, pet sitting, house sitting or any other service your neighbors need that you can provide for extra cash.

 Sell Some Stuff

Another way to raise some much need cash is to clean out your closets or garage and sell some items you no longer need. You can go the garage sale route or consider selling items online via sites such as eBay, Facebook Marketplace and Mercari. If your closet is bursting at the seams, consider thinning it out with sites such as Poshmark and ThredUP.

It’s also possible to make a bit of money from old technology you have laying around your home. Decluttr is tech resale site that can help you move some of your old devices. 

Finally, consider a garage sale. Let your neighborhood know with Nextdoor and Craigslist posts. Put plenty of signs up in the neighborhood and make sure you price your items right to make sure they move. 

Tags: , , ,