Experts recommend evaluating your budget anytime there is a big change to your lifestyle or a major life event occurs.
With social distancing and quarantines, everyone has experienced a big change to their lives, and many people are now working from home due to the Coronavirus. This is a great time for reevaluating monthly budgets.
Here are some tips to follow if you are making some adjustments to your budget and some questions to ask yourself:
- What are your financial goals, and have they changed over the last several months?
- Look at budget vs. actual spending in each category over the last few months. Calculate average over spending or under spending and adjust each line item accordingly
- Has your household and/or personal income changed?
- Have your transportation needs and costs changed as a result of job loss or change or the fact that you might be working from home now?
- Do you need to make changes to your grocery and/or entertainment budgets?
- Do you still have ample savings to cover emergencies and unexpected expenses? (Rule of thumb is enough in savings to cover six months of living expenses)
- Do you have credit card debt for which you would like to establish a payoff plan?
Assessing your budget on a regular basis is the best way to ensure that you are reaching your financial goals and making the most of your hard-earned money. It is recommended to do this on a monthly basis for best results.