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The COVID-19 pandemic is changing the way people plan for their future. For those saving to buy a home, the landscape may seem daunting. However, this new world of social distancing and stay at home orders is an opportunity to rethink your spending and saving plans. Keeping the following suggestions for your budget and finances in mind can help make your dream of buying a home a reality.
Rethink your budget:
If there have been changes to your income amid COVID-19, adapting your budget is a logical and necessary step. If your income has gone unchanged, certain tweaks to your budget can yield significant savings. Knowing the leisure portion of your normal expenditure has been removed for the time being is a great starting point for reassessing your spending.
- Begin with your income and assets
- Determine your household’s new baseline and arrange your new budget accordingly
- Divide your budget expenses out into Fixed and Variable
- Adjust for changes in essential costs—Housing, Utilities, Insurance, Food
- Put into savings what normally would have been your leisure spending money
As the stay-at-home lifestyle continues, take a look at your unnecessary costs for such things as memberships, subscriptions, and online shopping. Reach out to the subscription organizations and see if they are offering any options to delay your membership until a later date.
- Categorize all active memberships as Cancel, Adjust, or Keep
- For live entertainment, research how far out the venues have postponed shows
- Adjust your online shopping needs for your current lifestyle
- Reassess the must-haves of your new stay-at-home daily life
Review your finances:
If you’re planning on buying a home in the near future, you are likely already on your financial planning journey. With added uncertainty around COVID-19’s effective timeline, the more information you can gather, the better. In these unprecedented times, flexible solutions are being provided to customers. Exploring what options your banks and issuers are offering will keep you informed and prepared while keeping your finances in order.
Contact your credit card issuer to see if they are offering any of the following options to customers:
- Payment deferral or forbearance
- Flexible fee policies
- Lowering your monthly payment or interest rate temporarily
- Forgiveness or relief from late fees
Following the steps outlined above can go a long way towards helping you save for a home. As your finances are impacted by the COVID-19 pandemic, take time to adjust accordingly. Continuing to gather information and developing a strategy will help you steer your eventual home purchase in the right direction through these uncertain times.