With the market in flux, businesses closing left and right, and layoffs happening right before our eyes due to the coronavirus pandemic, the entire world is going through a financial crisis.
Given the circumstances, people are rightfully scared. Survival mode has kicked in in all of us. And when it comes to our finances, the questions come pouring in: should you take all of your money out of the bank? Sell your stocks? Keep your money in your 401k? Buy gold?
We brought Errol Gerson—ArtCenter professor, financial consultant, former CPA, and author of our Managing Money course—on our livestream to lend his expertise on the 8 things you can do to lower your expenses to survive the financial crisis. In the video above, he addresses what you can do to increase your income, monitor your business expenses, and how you can lessen your personal expenses.
The average person’s budget consists of these top 8 expenses:
- Housing
- Transportation
- Taxes
- Utilities and maintenance
- Food
- Personal insurance and retirement
- Debt payments
- Healthcare
These necessities typically come at a fixed price every year or every month, so looking at this list, you’re probably thinking, “there’s no way I can cut costs there.” You could cut one of these things off entirely, but that seems a bit crazy, especially in today’s climate.
As Errol points out in the video, “what is measured improves.” Just from paying extra close attention to these top 8 expenses, you’d be surprised how much more money you can save monthly.
For starters, with housing, Errol advises that you make direct contact with your landlord or owner of the home. If you’ve been severely impacted by the crisis caused by COVID-19, explain your situation. Depending on your housing situation and what state you live in, you may be able to ask for an extension on your next payment.
With regular recurring expenses, like utilities, maintenance, and transportation, Errol advises you also contact these businesses and, if you can, negotiate a rate or some sort of plan for the next few months. For example, you can call your cell phone provider and negotiate either a lower payment, an extension on your payment, or a new plan with reduced utilities.