How to cut costs when you've lost your income - Refresh Financial

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How to cut costs when you’ve lost your income

Cutting unnecessary costs during COVID-19.

Expenses You Need To Be Cutting Out Now

If you are one of the many Canadians that have suddenly lost their income due to COVID-19, you're probably scrambling to meet your financial obligations. Cutting out unnecessary expenses is the number one thing that you can start doing today to help you survive this difficult time. There are many daily expenses that we are happy to pay when we have income, but that are easy to give up in an emergency. And this is an emergency.

Here are 8 expenses you need to be cutting out now.

1. Eating Out

This one is a no-brainer, especially as all restaurants are closed anyway. Take-out, however, still counts as eating out and should be the first expense to cut out when your income has been significantly reduced. After taxes and tip, you’re likely spending at least $15 per person, which could fill your plate with a home-cooked veggie stir-fry for a week. Going to restaurants even twice a week could cost you $120 a month for just one person! So, while we can all agree that take-out is convenient, and delicious, it's not going to do your bank account any favours if you've just lost your income due to COVID-19.

2. Cable TV

In this day and age, there are so many alternatives to cable television, and there is literally no reason why anyone needs it. You may think that being at home, in quarantine or self-isolation would be impossible with cable TV, but you're wrong. Cable TV is a nice-to-have, not a necessity when you have lost your income. Netflix is relatively cheap in comparison, but again, if you've lost your income, even Netflix is an expense you don't need.

Cut the cable cord and free yourself of this unnecessary cost. You can always go back to it when you regain your income.

3. Useless Insurance & Protection Plans

If you have home insurance, then everything you own is protected. Plus, the likelihood that you’ll end up ever needing that protection for your phone or your new microwave oven is next to nil. You’re pouring money into something that you will likely never need. If you can cancel them, do.

4. Power/Utilities

Energy efficiency isn’t just good for the environment, it’s also great for your wallet! There are tons of resources online for how to lower your utility bills, from using energy efficient bulbs to using fans instead of your air conditioning. A little research can go a long way to saving on your monthly bills. Most utility companies are offering COVID-relief plans for payments, so make sure you check those out too.

5. Gym Membership

This is another expense that is redundant right now. Gyms and fitness centres are currently closed, so it might be difficult to reach someone about cancelling your membership, but try nonetheless. Staying in shape is definitely a worthwhile endeavor, and exercise is proven to help alleviate anxiety. However, gym memberships can be expensive. Don't sacrifice your financial health to stay physically active. Instead, make use of the many free ways to stay healthy, like hiking the hills around your neighbourhood or going for a run or a bike ride. If you need weights, you can always fill some old milk jugs. Gym memberships are a luxury not a necessity.

6. Cell Phone Plan

Today's cellular plans can come with a lot of bells and whistles, but are they always necessary? When was the last time you checked your data usage? Is there a smaller plan that would suit you? Assess your monthly usage and see if there is any wiggle room to downgrade your plan. Visual voicemail can be adjusted to regular voicemail, and perhaps you don’t need unlimited calling minutes. If you can survive with a basic plan, do it and save your money. If you're home all day, paying for Internet, why not ditch the data altogether until the pandemic is over?

7. Late Fees

If there’s one thing you want to avoid, it’s paying late fees. An easy way around this unnecessary expense is to set reminders for yourself or use an app that will send you alerts when bills are due. Use your phone, computer or even sticky notes to set reminders for yourself. Unless you have negotiated payment deferrals, bills still need to be paid, and paying them late should be avoided at all costs, as you only end up spending more in the long run.

8. Transportation

If you have lost your income and no longer need your vehicle to get to and from work, see if you can change the type of insurance you have on it. When vehicles are used for pleasure use rather than daily to go to and from work, the insurance costs can be lower. If your family has two vehicles, consider taking one off the road until you have income again.  Alternative transportation methods such as walking, biking or taking the bus can offer substantial monthly savings over a car. If you're worried about getting groceries without a car, many supermarket’s across Canada have an option to order your groceries online through their website and get your shopping delivered to your door. Check out our guide to saving money on your grocery shopping

This is a tough time, but it won't last forever

It might seem like nothing is going right for you. If you've lost your income it will be a very stressful time, and on top of that, you're being asked to cut down on many of the things you enjoy. However, try to remember that this won't last forever.

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