Tips For Budgeting For Rent During COVID

Americans are suddenly finding themselves in a position where they need to be tight-fisted with their money. Those of you who once enjoyed a comfortable income level, now need to learn how to readjust your spending habits.  

Many renters are struggling to face new realities. It’s a challenging time for many: high unemployment rates, income reductions, mortgage struggles, and foreclosures — the list goes on. But with a solid plan, it doesn’t have to be all doom and gloom.  You can manage your finances during these difficult times.  

These five rent budgeting tips will be a ray of light during a difficult time for many.

Why Is Making Your Rent Payments Crucial?

The tenant-landlord relationship is not always easy to understand. Renters assume that their landlords are in a better and more financially stable situation then they are because they own New York City real estate. This makes it easy for renters to delay rent payments or make partial payments to give themselves some financial relief. The reality is that the recent economic shift is affecting everyone, including your landlord.

If you’ve been making late or partial rent payments, you are probably not the only tenant doing so. Your property owner relies on these payments to satisfy their mortgage costs. When rent payments are slow, your landlord needs to pay out-of-pocket. This may not be easy if their income is also slowed because of the current economic environment.

What happens when your landlord can’t pay their mortgage? Many lenders are offering increased grace periods for late mortgage payments. However, if your landlord still struggles to make their payments, it could result in foreclosure. The new property owner, or the bank, becomes your new landlord and may evict you.

The last thing you want at this difficult time is more stress!

5 Tips For Budgeting During COVID

To help better ensure that you have enough to pay your rent and still have money left over for groceries, bills, and other essentials, here are a few tips to follow.

1. Get Out of The Short-Term Mindset

If the world has learned anything in the past few months, it’s that COVID-19 isn’t going anywhere. If you’re still in the mindset that this debacle will all be over soon, it’s time to change your thinking and start planning for the strong possibility that we will all still be facing these realities for the long-term.

Again, this doesn’t mean that the future is dark or scary.  It merely means that we need to readjust our thinking.

To start, adopt a budget plan that you can rely on for months to come. It also means that you need to create money-saving tactics that are sustainable. If you’re pulling money from savings each month to offset a reduction in income, there will come a time when your savings are dried up. What then? That’s why you must think about adopting a zero-based budget.

2. Zero-Based Budgeting

Zero-based budgeting is an easy concept that aims to spend every cent of your income and prioritize expenses. Every dollar that comes in has a purpose. This prevents you from overspending or misallocating your income.

If you roughly know your income, you can create a zero-based budget ahead of time to make a strategic plan for every incoming cent. Categories for rent/utilities, groceries, subscriptions, and other sources of spending will help you stay organized with your zero-based budget.

3. Check on Recurring Spending

You may not know or realize where some of your money is going. Pre-COVID-19, small monthly subscriptions were hardly a drop in the bucket. You didn’t notice spending $4 a month for an app you never use or $11 a month for a magazine that sits on the coffee table. Now, these small recurring payments are putting stress on your already-strained bank account.

Most banking apps will allow you to search your statements for recurring monthly payments. This will help you see how much you’re spending on subscriptions and services. There may be a few services that you can shut off or even downgrade to a non-premium account and save yourself some money.

4. Reassess Your Grocery Budget

There are unavoidable costs in your budget, such as rent, utilities, loan payments, etc. Groceries are another fixed cost. However, compared to these other essential costs, your grocery expenses are controllable. Supermarkets are also one of your top spending categories (if it isn’t, there is a big problem with your spending habits!), it’s probably second behind your rent.

Look at how much you’re spending on groceries each trip and explore ways to cut back. Here are some ideas:

• Make a list before you go. This will help you avoid spending on splurge items.
• Look for cheaper brands and other alternatives to what you’re used to.
• Plan your meals for the week by what’s currently on sale. Weekly saver mailers are your friend!
• Also, plan your meals to account for leftover meals and ingredients. You’ll cut down on food waste by doing this!
• Prepare meals in advance to help yourself resist the allure of ordering in or getting takeout food.

5. Make Some Sacrifices

Everyone has some guilty pleasures in their lives. These expenses are often considered must-haves. Maybe it’s the money you spend on your nails or hair, or the cost of a weekly movie-pizza date night with your partner. Everyone has some luxury expenses. If your budget is particularly tight and you’re having a tough time making rent payments on time, these luxury expenses should be the first to go.

It’s not easy to cut these items that you consider “must-haves,” but unique times means making tough sacrifices. You can always add them back to your budget plan when your income situation improves.

Conclusions

The last bit of advice that we will leave you with is simple: talk to your landlord or rental company. As stressful as these times are, the best approach is to work together. Have an honest conversation about your situation and ask them about theirs. This alleviates stress for both parties, but it will help you collectively come to a resolution that suits everyone.