Here’s What to Trim (and What Not to Touch) From Your Budget Right Now
The New York Times' Emma Pattee spoke with Lazetta about helpful changes you can make during the coronavirus lockdown.
So much has already been cut out of my life in the past month. Restaurant meals, birthday parties, a trip to Joshua Tree, haircuts, yoga classes — even a priceless hug from a friend. But when my work dried up overnight in early April, I realized that one more thing needed to be cut: my expenses.
As tempting as it was to say that the money my family was saving on dining out and gas for the car was enough, we needed to find more areas to save during the coronavirus outbreak. I set out to discover the smartest ways to cut costs quickly, even when the future is so unknown.
Focus on a couple of big expenses
To make a big impact on your budget as quickly as possible, start with larger expenses. “It’s much better to tackle two big expenses than trying to tackle 20 small expenses,” said Ramit Sethi, personal finance expert and author of the New York Times best seller “I Will Teach You To Be Rich.”
Start by reviewing your three biggest expenses: housing, transportation and food. If you have two cars, you can reduce or cancel the insurance for the one you’re not driving. (Just be aware that some states require you to turn in the plates for the car, so it will take some time to reinsure it.)
Your restaurant budget should have dropped significantly now that many businesses are closed because of the outbreak. If it hasn’t, think about cutting takeout.
Lazetta Braxton, a certified financial planner and the Co-CEO of 2050 Wealth Partners, a financial planning firm in Baltimore, recommends that homeowners with good credit and stable incomes look into refinancing while rates are low. Renters may be able to negotiate on payments, according to Mr. Sethi, who has heard from several of his readers that they’ve had rent reduced or even waived after reaching out to their landlords.