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Many Americans are facing difficult economic times as COVID-19 cases spike nationwide and many states impose new restrictions. Whether your financial woes are pandemic-related or existed before coronavirus, there may be options if you're short of cash and feel like you've already cut everything possible from your budget. Here are four things to consider when you feel like you aren't accomplishing all you hope to with your money.
1. Look at the big stuff
Often, people focus on reducing discretionary spending, aiming to reduce cash outflows on things such as dining out, cable TV, or entertainment expenses. And while making these cuts can make sense if you're overdoing it, there's only so much you can save by skipping a restaurant meal or two or switching to a cheaper cell phone plan. Sustaining big budget cuts by stripping the fun from your life can also be difficult over the long term.
A bigger change may be in order if you feel like you've already cut all you can. For most people, the largest monthly payments are for homes or vehicles -- and reducing these costs could free up tons of cash. You could consider downsizing to a smaller home, finding a roommate, getting rid of a vehicle, or switching to a cheaper car. These are big shifts, but one of them may reduce your monthly obligations by hundreds of dollars a month.
2. Consider ways to boost income
If you feel like you can't make any more budget cuts, that may, of course, legitimately be the case. If so, and you're still not doing all you'd like with your money, there's only one remaining solution: Earn more. Fortunately, you aren't limited in how much you can earn, even if you're limited in how many spending cuts you can make.
You could try to raise the amount you make at your current job by offering to work overtime, asking about advancement opportunities, or negotiating your salary. Or you could do a few hours of work at a side job or even consider starting your own business if you've got an idea that won't require much capital to get off the ground.
3. Look into government benefits
If your income is too low to cover the necessities and you're already working multiple jobs or can't do so, you may need to look into government aid. There are a number of programs, including Supplemental Nutrition Assistance Program (SNAP) or Medicaid, which you may qualify for. If these benefits can defray some of your expenses, they may make the numbers work better in your monthly budget.
4. Commit your raises to financial goals
While you may not have as much money as you feel like you need, that doesn't necessarily mean you'll be stuck in this situation forever. Hopefully, as your skills increase and you get more experience, you can advance in your career and make more money.
When your salary increases, you don't have to upgrade your lifestyle. Before you even get the chance to spend the extra money, commit to using it for long-term financial goals. If you get a 2% raise, for example, keep your take-home pay the same while you devote the extra money to saving for retirement or building up your emergency fund in a high-yield savings account.
By committing to using any extra money to improve your financial situation, you'll accomplish some of your goals without making more cuts to a budget that you feel is too tight.
