The global pandemic has affected most people in one way or another, but one area where many people will be feeling the effects is money. Many people have lost their jobs, or have seen their income change, which can have all kinds of knock-on effects on your home, family life and more.
Whether your finances have been affected or not, now is a good time to take charge of your financial situation and make sure you’re prepared for the future. Life can be unpredictable, so it’s a good idea to have some plans in place.
Get a handle on your finances during the pandemic with the following tips.
See where you are with your current savings
It’s important to understand where you are with your savings so that you can put a plan in place in case of an emergency. Many people have their savings stashed away in different accounts and pots, while others might not have any savings at all.
Creating a spreadsheet of your different savings can help you get a closer look at your total so that you know what you’re working with.
If you don’t have savings right now, you should think about setting some savings goals. This will help you work out what you need to cover your emergency fund in case you’re unable to work, as well as some savings to cover home emergencies and your long-term goals.
Don’t be disheartened if you don’t have any existing savings; if you start now, you’ll soon have a healthy pot of cash to dip into when you need it.
Assess your outgoings
To be able to save as much as you can, as well as free up money when things are tight, you need to take a good look at your outgoings.
There are some things you could stop paying for straight away, such as gym memberships or unnecessary subscriptions – this will help you free up some money immediately.
Meanwhile, spend time doing some comparisons to see if you could save money on some of your outgoings. Changing providers for your cell phone, internet and other regular outgoings could reduce your monthly spending, allowing you to put more of your money into savings!
Make changes to your current spending habits
Being in a lockdown situation has been beneficial for many people’s finances. Not being able to go out and do the things you’d normally do means you’re spending less, while also saving money on buying clothes, fuel and other things as a result. If you’ve been able to save that extra money during this time, that’s great, but you might want to look at other ways you can cut your spending and form some better money habits.
Some simple tips for reducing your spending include:
- Use budgeting apps to help you track your spending and set different spending goals for each month.
- Learn how to cut your grocery spending so that you can save money on food each month.
- Make the most of online deals and coupons.
- Sleep on online purchase decisions. Many of us spend online to relieve boredom or because we’ve been taking in by a marketing email – sleep on it and in the morning, you might realize the thing you urgently needed to buy is not so urgent after all!
- Reduce your energy bills by being stricter about switching off the lights and your appliances at night.
- Leave your wallet home some days – it will stop you buying unnecessary coffees and other to-go treats!
Work on paying off your debts
With things being as uncertain as they are right now, you should think about clearing your debts so that you’ll have fewer payments to be responsible for if your income takes a hit.
Start with the loans or credit cards that have the highest interest.
You can clear your debts quicker using this method and avoid paying back more money overall. You can also look at moving to zero-interest cards as a way to maximize what you pay back each month. Try to put aside as much money as you can to clear debts quicker, leaving you with more money to put in your savings.
Understand your legal position
A lot of people are facing difficulty right now, but there are systems in place to help with at this difficult time.
It’s important that you know your rights and make sure you’re taking advantage of all the help and support that’s available.
The Eviction Moratorium has been put in place to prevent evictions for those who have been impacted by the coronavirus, protecting you if you rent your home. With the support that exists, you need to make sure you make the most of any help that’s available.
Get the right insurance policies in place
Insurance is critical for making sure you’re not left with hefty bills to pay if something happens to your health, your home, your car, etc. Having the right policies in place can give you peace of mind that you won’t be left out of pocket if something goes wrong, which can be vital in times of a crisis like this.
Make a note to review your policies regularly to make sure the cover is accurate for your current circumstances.
While it’s not something that many people like to talk about, you should also consider a will. Many people are unaware of their relatives’ wishes when they die, and in the event of a tragedy, you’ll want to make sure that your family is taken care of.
Consider a side hustle or a second income
If you want to boost your savings, income and increase your financial security, you should consider taking on a side hustle.
There are a lot of great ideas for side hustles that you can start at home, in your own time, helping to drag you away from Netflix and do something productive (and profitable!) with your time.
More and more people are using the internet to earn a second income, and it could be a good way for you to boost your finances, especially if you feel as though there’s a tough time ahead for you and your family!
Make creditors aware of any changes to your circumstances
If, for any reason, your circumstances are looking as though they might change, make your creditors aware as soon as possible.
It’s important that they are aware that you might fall behind on your payments – doing so could save you chargers. Some lenders are implementing special policies during this time, helping you take payment breaks or reducing your interest so that you can take some time to recover financially.
Dealing with your creditors can be scary, but they’ll mostly want to help and avoid you getting into further debts. Get ahead of things so that you don’t owe more money from late payment fees or exceeding balances.
Cut down on your car use and go green too!
Your car can be one of your biggest expenses, but could there be ways for you to save money with it? It’s easy to rely on your car to get around, but could you walk more or cycle instead?
Cars contribute to a lot of pollution, and you could make a real difference to the environment by using your car less – even a 30% reduction will save on your running costs, and mean you use up less fuel!
You could also consider switching to a cheaper car to free up some money. While it’s great to have a nice car, it isn’t necessary to have the top model – you could even buy a used car to save some cash. Don’t forget to review your car insurance premium each year – there could be a lot of savings if you’re a careful driver with a good track record!
Be less wasteful with food
It’s easy to spend a lot of money on food each month and between eating out and buying food at the supermarket, you’re probably spending more on food than you need to.
By being more sensible with your food habits, you can learn to be less wasteful, and make sure you’re not wasting money too.
You can start by making a meal plan each week, deciding what you’re going to make and then building your shopping list based on this. Be sure to freeze extra portions or ingredients so that you won’t end up wasting them. Try to only buy what you need and limit your treats – you’ll be able to save a lot of money each week that will soon add up as the months go by.
Whatever your current circumstances, it is good sense to assess your financial situation and make improvements where necessary.
With a plan in place should your income or circumstances change, you could feel a lot more prepared financially. The pandemic has been a tough time for everyone, but you shouldn’t let it affect your future. Get a handle on your finances now to provide a secure future for you and your family.