Only 17% of Americans Have Made This Smart Money Move Since the Pandemic Began
- The pandemic inspired a lot of people to rethink their approach to personal finance.
- It pays to examine your spending and make sure you're not going overboard.
If you're not one of them, it may be time to rethink your to-do list.
The events of the past two years have caused a lot of people to rethink the way they spend and save. In fact, a lot of people learned the hard way that without money in the bank, they were one financial emergency away from disaster.
In light of the pandemic, many Americans have taken steps to boost their cash reserves and pay off costly debt. At the same time, though, just 17% of Americans have set up a budget or made changes to an existing one over the past two years, according to a recent Fidelity survey.
That's surprising given the way living costs have soared since mid-2021 as rampant inflation took over.
If you haven't set up or revisited your budget since the start of the pandemic, it pays to do so now. Here's how.
1. Identify the right tools
There are different tools you can use to set up and maintain a budget. You can use good old paper and pen, a spreadsheet on your laptop, or a budgeting app that syncs with your credit cards and bank account to categorize your spending for you and make it easier to track. Take some time to play around with different options to see which works best for you.
2. Update your numbers to account for recent changes
These days, the cost of gas has soared to well over $4 a gallon in many parts of the country. Meanwhile, you're probably spending more money to put food on the table than you were a year ago.
It's important your budget is as accurate as possible, so spend time combing through your recent bank account and credit card statements to see what your bills now look like. If your budget allocates $600 a month for groceries and $200 a month for gas, but you're now spending $700 and $250, respectively, you'll want to use those updated figures.
3. Think about ways to cut back if you don't like how the numbers look
Perhaps you're able to comfortably cover your living expenses without racking up debt or dipping into your savings. In that case, you probably don't need to rethink your spending.
But if that's not the case, and you've been struggling to make ends meet, then it may be time to eliminate some expense categories in your budget, or at least reduce them. That could mean canceling cable for the time being and slashing your remaining leisure spending in half until living costs come down or your income rises.
A lot of people's expenses have shifted since the start of the pandemic. In some cases, they've changed in a positive way. For example, you may now be working remotely on a permanent basis, thereby eliminating commute expenses.
At the same time, it's hard to ignore the fact that living costs are generally up, so if you can't remember the last time you looked at your budget, carve out some time to give it a refresh. And if you don't have a budget to begin with, make creating one a priority sooner rather than later.
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