How to avoid overspending during isolation

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The coronavirus is having a direct impact on our lives, which in turn affects household finances. These changes in the daily routine are a good opportunity to pay more attention to the household budget and thus avoid overspending during isolation.

And it is that staying at home has the potential both to save us money and to spend more, depending on how we deal with it.

Changes in consumer habits

Right now we are facing an isolation of indeterminate duration accompanied by a possible decrease in income for many families, due to the paralysis of a very significant part of economic activity.

Trying to see the positive side of things, this new situation also implies changes in our consumption habits that can help ease our finances.

Thus, for example, the items of the family budget linked to any outside activity, such as eating out, going to the cinema or the theater, or a short vacation, will be reduced to zero. There will also be savings on public transportation or fuel, and other expenses associated with leaving home every day, such as coffee at the bar next to the office, to name one.

All these expenses, added, can represent significant savings in the family budget.

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Spending less can lead to overspending

However, this saving will only be noticed in the overall budget if these amounts do not end up in other items.

Keep in mind that, on the other side of the scale, there will also be an increase in food expenses, on the electricity and gas bill and, perhaps, on subscriptions to online entertainment.

That’s why it’s important do not fall into the trap of spending all that we have saved without taking into account the increase in other expenses.

A good trick can be to redirect this extra money to a mutual fund. Thus, by removing a certain amount from our usual account, we are less likely to be tempted to make an impulsive purchase, something easy in situations of isolation and boredom.

Adjusting the family budget to avoid overspending

During these weeks of lockdown, it may be a good idea to review how our expenses have changed and adjust the family budget to make sure we don’t overspend.

Not in vain, a new routine requires new finances. In addition, balanced family finances can also help us better cope with these days of isolation and uncertainty.

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Savings at home, Coronavirus, Personal Finance, Budget

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