During this time of financial uncertainty, it's important more than ever to have a budget. When you're feeling worried or confused, a budget can serve as your anchor to financial security. There are a lot of questions about a post-pandemic future that can’t be answered right now, but there are things you can do immediately to protect your finances.

If you’re ready to take action, here are budgeting tips for the "new normal" that you can start with.

1. Recognize changes in your income

Due to the pandemic, many people are facing pay cuts and unemployment. Are you one of them? Is your income affected by coronavirus or social distancing measures?

The first step to an effective budget when you’re facing a crisis is to recognize the changes in your income, including your spouse’s or partner's. You have to work with this new number and embrace it. Do not hold onto the thought of your pre-crisis income or the income that you expect once the crisis is over. Who knows, right?

What matters is your reality right now. With any reduction of income, it’s important to consider ways to cut back on your lifestyle. And if you are among the lucky few with a thriving take-home pay, get into a savings mindset in order to be prepared for any downturn.

2. Focus your spending on just the essentials.

Once your monthly numbers are set, prioritize necessities that can protect and sustain your family. These include the following:

Beware of wants that disguise themselves as needs. Facebook groups selling almost anything you could want have multiplied during quarantine. Name it and you can find it. Milk tea, gourmet leche flan, ube-cheese pandesal, seafood boodles, and more.

While food is essential, feasts and treats that are usually reserved for weekends or special occasions are finding their way into an already limited budget. The same goes for spending money to try the next trending recipe.

3. Cut off expenses that you had planned for earlier

COVID-19 caught us all by surprise. Some of us had already made plans to travel, go on vacation, and maybe buy a new house or car. Even if you’ve shelled out on reservation fees or initial down payments, give these things a second thought. Even when the quarantine is over, can you still afford to go on that vacation when job insecurity is high?

If your answer is no, letting go or postponing some of your plans will be painful, especially when dealing with sunk costs. However, making a decision today can reduce your mental and financial burdens tomorrow. More than anything, this gives you freedom and peace of mind to chart a brighter future.

4. Hack your biggest expenses

Your biggest expenses hold the biggest opportunities to save money. Examples are your rent, mobile phone plan, power, and internet bills. Downsizing these big-ticket items can rapidly reduce your expenses and free up much-needed cash. Here are some things you can try:

  • Negotiate the rent with your landlord or, if your situation permits, start looking for cheaper accommodation. Also, consider practice house hacking by sub-leasing a room in your apartment or take on another person to split your rent with.
  • Downgrade your mobile phone plan or switch to a pre-paid option. This way you have more control of your bill and only pay for what you actually use.
  • Identify appliances that consume the most electricity. Find ways to use them less or adjust their settings to harness power savings.
  • Downgrade your internet plan and make do without streaming subscriptions. Review your digital wallets like PayPal or Google Play and unsubscribe to apps or premium services that you don’t really need.
  • Cancel any monthly lifestyle memberships like your gym or spa, especially if you don’t plan on using these facilities right after quarantine.
  • If you get an itch to shop online, no matter how good the deal, always evaluate if it's a need or just retail therapy.

Depending on your situation, these tips may or may not be applicable to you. But extraordinary times call for extraordinary and creative measures - and it's better to be proactive about it. Use this expense calculator to find out where your money goes and see how much you can save.

5. Build up your emergency savings

It's hard to save any more money in the middle of an emergency. The good news is that your new budget can leave you with new-found cash. Use these savings to beef up what's left of your emergency fund. If you don't have one, now is the time to start. Life’s surprises don’t stop even after lockdowns. When the going gets tough, an ample emergency fund gives you the wiggle room and confidence to recover.

Remember, you are not alone. Most of us are facing some form of financial uncertainty, and we have different ways to cope. Some may have felt the immediate effects of COVID-19 on their pockets earlier than others - but take on the mindset that no one can be spared. Creating a realistic budget now will help you make the bright financial moves while you can.

Do you want to be in a better financial position and have more peace of mind? What changes are you willing to make on your budget?

Lace Llanora

Lace Llanora is the grand winner in the 2015 SINAG Awards and second runner up in the 2016 SINAG Awards. She shares ways on how to achieve financial goals and independence on her blog, mommylace.com