3 tips to budgeting in a financial crisis

Estimated reading time
 5 min

Learn how to:

• Make a budget in hard times
• Get savvy with your savings
• Set a goal for the future

Whether it’s a personal crisis, a financial speed bump or a global recession, getting through financial hardship requires careful planning.

Crisis planning might be stripping your budget down to the essentials, or prioritising where your dollars go (or a bit of both). While your circumstances might leave you with little or no left-over cash, it’s important to focus on having a budget and reducing expenses where you can to save a bit of extra money, even if it’s a spare dollar or two.

We’re going to share three simple ways you can keep your finances in check for whatever comes your way.

1. Make a budget

Making a budget can help you map out your income and expenses to work out what you need now and in the future, while being mindful of your current financial situation. For example, your budget could help you work out where to cut back on expenses, like cancelling your subscriptions, which can help you cover the cost of important essentials, like insurance.

This can help you avoid the scarcity mindset, a way of thinking where we focus on what we need now and have difficulty thinking about how it will affect the future, which can lead to poor decision-making (especially when it comes to your finances).

What can you do now?

• Make a budget and work out the cost of your immediate and long-term needs. The ANZ 50/30/20 budget planner is a good place to start mapping out your financial situation.
• Prioritise your wants and needs. For example, you can swap your two nights of takeaway for a home-cooked meal on a budget.

2. Get clever with your saving

When hard times hit, it’s time to get inventive with what you’ve got. Dig into the back of your wardrobe for new outfit combos, swap items with family and friends (great for kitchen items like a slow cooker or popcorn machine) and try online buy, swap and sell groups or online marketplaces to keep your wants alive at second hand prices.

And why not jump on the DIY bandwagon too? From turning your recycling into toys for the kids, to baking bread and growing your own veggies, we could all use a bit more homemade in our lives if it helps keep our savings up, our expenses down, and our fingers away from online shopping.

It’s also a good time to look for ways to save without sacrifice, such as hosting at-home movie nights instead of going out or checking if you can get a better deal on your energy bills. These small changes to your daily routine can have a positive effect on your finances, even when times are tough.

What can you do now?

• Join online buy, swap and sell sites to keep tabs on pre-loved goods that you need or want.
• Research online tutorials on how to make or grow everyday essentials at home, like bread-baking articles or beginner gardening videos.
• Use your budget or banking app to work out where you can save money. You can also take a look at our favourite ways to save money quickly and add these money-saving skills to your repertoire.

3. Set a long-term goal

While restricting your spending can initially feel like you’re missing out, we all need something to look forward to and a little bit of optimism can go a long way. So, if it feels good to plan for a big future goal, then get your dream board out (or download ours), and set aside a few dollars every week for your long-term savings goals whenever you can. These goals can help you strengthen your financial resilience, so you can come out the other side stronger and financially savvier than before.

What can you do now?

• Write up a SMART financial goal that you want to work towards – it can be as big or as little as you want it to be.
• Tell someone you trust, like a friend or family member, and have them keep you accountable.
• Don’t forget to acknowledge your hard work. You can give yourself a budget-friendly reward too, like an at-home spa day or a picnic in the park with your friends.

Can I still save money?

There is no one-size-fits-all answer to the ‘how much should I have in savings’ question. For some, you may need to spend all that’s coming in for a while during a crisis. But experts agree that if you can keep saving, you should – even if it’s a token amount.

It doesn’t take much to start saving and it’ll feel good to have a head start when your life returns to some kind of normal.