How to save and budget during the COVID-19 pandemic

How to save and budget during the coronavirus pandemic

CLEVELAND, Ohio (WOIO) - If you're not having any problems paying your bills, now is the time to save in case things change in the future.

The COVID-19 pandemic has led to a volatile economy and job uncertainty across the nation.

You can start cleaning up your finances by making a budget.

“This whole crisis has really underscored how important it is to have emergency savings. So if you do still have income coming in and you have the option to put some of your spending into savings instead, it’s a really good idea to do that just because there is so much instability right now, and people are so stressed out, having that savings account, having that savings tucked away can give you piece of mind too. You know it’s there for you if you needed it,” Kimberly Palmer, a personal finance expert at Nerd Wallet said.

Palmer recommends building up your emergency savings.

The goal is to have three to six months-worth of expenses saved.

“Also, if you’re currently putting money into savings for retirement or college savings, you might want to consider temporarily pausing that or at least decreasing the amount you’re saving, so you have more flexibility in your short term savings, you have that access to cash,” Palmer said.

Now is the time to go over your finances and see what spending you can cut.

You should create a budget if you don't already have one.

“We really encourage people to use something like the 50/20/30 budget, which basically means 50 percent of your take home pay goes to needs, 30 percent to wants and 20 percent to savings and debt payments. Basically it’s a way to tell, am I spending too much? Do I need to cut back? And so if you use that tool, it can help guide you, and you can say oh yes, I am spending too much, right now I can scale back, put some more money into savings. Just so you have that flexibility,” Palmer said.

You can read more on how to build a budget with help from Nerd Wallet here.

Read tips on how to save money here.

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