Introducing the idea of a 'Just for Now' budget. It lets you make small changes -- or medium ones -- or the big ones. Many of these have been tested over the years by the Brick, myself and others -- and they save money. Using one or more of these tips will give you additional cash for paying bills, being able to afford a luxury or two, or saving for the future.
Whatever you decide -- DON'T JUST DO NOTHING.
NOW IS THE TIME TO ACT, WHILE YOU STILL HAVE OPTIONS.
(See Part One before you begin here.)
CREDIT CARDS
Just for now: Unless you're getting amazing travel points, or some other Really Good bonus, YOU SHOULD NOT BE PAYING AN ANNUAL FEE. Why pay the credit card companies for the privilege of spending your own money? (Yes, I feel strongly about this.)
You should, on the other hand, be getting cash back for every purchase you make. Even 2% back adds up over the course of a year.
If you're carrying credit card debt -- and many people are -- look into transferring the balance to a 0% card, while you start paying that balance down. Some financial experts disagree on this -- but I cannot see paying 19% interest while you're putting substantial amounts into IRAs or emergency funds. PAY THE CARD DOWN. Here's where your stimulus check can really be of service.
Better: Can you discipline yourself to pay the balance every single month, without fail? You will save so much money, especially when combined with the tips above. If you can do this, then go ahead and charge your fixed expenses, as much as possible: rent, utilities, phone, etc. You'll get cashback on bills you have to pay, anyways.
Necessary: Cancel the cards -- or put them in the freezer. You should not be buying appliances (unless they're absolutely necessary), designer clothing or taking luxury vacations, until those cards are paid off. This will become even more important when money gets tighter.
Much of Americans' financial problems stem from this, I believe. It's far too easy to 'just put it on the card.'
PHONE
Just for now: Do you really need the most expensive plan? Can you cut down on minutes? Have you recently called and asked for a lower rate? Why not?
It may be time to wait before getting an upgrade, as well. For right now, can't you make do with what you've got? IPhones can still be read with broken or cracked screens. (In fact, my phone currently has a crack from side to side. It still works.)
Better: Look into a group rate -- you may well save. Combining services may save you extra, too. In all cases, ask for a lower rate or specials. It won't hurt, and the answer is often 'yes.' Even temporary lower rates will save you in the long run.
Necessary: Does your younger child need a cellphone? (And if they're a teenager, why can't they pay for their own phone plan?) For that matter, do you need both a home landline AND a cellphone? Seriously consider cancelling these.
TRANSPORTATION/INSURANCE
Just for now: If your vehicle is paid off, call and ask for options. A higher discount will save you; so will paying the bill in one or two payments. (Monthly payment mean extra fees.)
Can you take the car or bus to work one or two days less a week? It's even easier, when you've got errands to run, to schedule them all in one time period -- saves gas and time.
We were surprised but pleased to get a refund check from Liberty Mutual for not driving much during Covid-19. (They didn't know about the world cruise.) It was only around $40 -- but every bit counts!
Better: If you live close to work, consider walking or taking a bike at least one or two days a week. Or get your partner to drop you off/pick you up at least one day a week.
Necessary: Park your vehicle -- and leave it there, unless you really need it. Or carpool with someone else: split the time between two or three others.
Maybe now's the time to sell it. (You'll save on insurance, too.) Rent a car when needed for vacations or longer trips. (A relative or friend may be happy to rent you their vehicle, provided you pay them for gas and upkeep, as well as some extra. We have also temporarily swapped with friends with the four-wheel-drive behicles were needed for hunting season.)
MEDICAL:
Just for now: This is one area that if you skimp on now, you take the serious risk that you could be wiped out later.
Medical insurance is surprisingly affordable on a lower income. (And now your income is lower.) Not only that -- you'll be penalized at income tax time if you don't have it. Check with your state's 'marketplace' plan. (I'm speaking from experience here.) A higher deductible means you'll have to pay some -- but the premiums will be lower.
If you're 65 or older, Medicare helps a lot. So does a supplemental plan -- a number of these are free of charge. FIND OUT MORE. We learned about the Brick's options by attending a free luncheon. We'd done research beforehand, so knew what would work for us, particularly overseas coverage. And a nice meal was thrown in, as well.
Better: Limit your visits to the doctor's office, for truly serious illness. Try as hard as possible to avoid visiting the emergency room. (They really soak you, even for an hour's visit.)
Ask: "If I pay cash, will you give me a discount?" The answer is often 'yes.'
If you're employed or self-employed, you can often set up a HSA -- and that money isn't taxable..
Necessary: Don't pay your bill -- in full, that is. Set up a payment plan. If they refuse, say 'I can afford to pay you $-- per month." Then do it. Ask about any kind of help for lower incomes.
Hopefully you're starting to see a little daylight. You WILL get through this.
This post may help, too -- saving and spending wisely, when you're living paycheck to paycheck.
Part Three is coming! Look for the conclusion to this series soon.
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