The coronavirus pandemic is not over yet. However, with vaccines rolling out across the country, the end may be near. While now is not the time to be permissive on public health measures, now is the perfect time to start planning financially.
1. Create a budget
Although creating a budget can be daunting, it’s one of the best tools for saving money. However, just as everyone’s financial situation is different, your best budgeting techniques will also be unique to you.
Keeping track of your spending habits is a great place to start. Although it may take time and expense change according to your priorities and finances change, there is a basic formula you can follow:
Describe all your fixed monthly expenses (bills, rent, etc.)
Estimate your variable expenses (gas, groceries, etc.)
Create a budget taking into account your expenses
A classic budgeting philosophy is the 50-30-20 rule, where 50% of your income goes to major expenses, 30% goes to non-essential expenses such as eating out, and 20% goes to paying off debt and spending money. ‘saving.
Dividing your money this way allows you to meet all your expenses while prioritizing your financial goals. However, you can adjust the percentages based on your goals and income.
2. Consider debt consolidation or mortgage refinancing
If you have an outstanding loan, you can save a few coins by exploiting the current low interest rate environment. For example, you can take out a personal loan from Gday Loans to pay off high interest loans. Don’t worry if you have a bad credit profile or are currently unemployed; Gday Loans can put you in touch with lenders who offer bad credit loans for unemployed people.
You can also refinance more than your current mortgage balance and use the extra money to pay off high interest loans due to rising property values. Although you may not need to consolidate your debt, refinancing your mortgage can save you a lot of money.
3. Practice conscious spending
The pandemic has forced us to reevaluate our spending habits. Most people have learned to eliminate unnecessary purchases. While it’s impossible to avoid discretionary spending every time, the more you practice avoiding impulse spending, the easier it is to save an extra coin each month.
Spending wisely means knowing where your money is going and making choices that align with your values. For example, if you choose to cook at home instead of ordering takeout because you want to avoid plastic packaging, you’ve made a conscious decision that will also save you money.
4. Plan for the unexpected
The economic instability and job loss that followed the onset of the COVID 19 pandemic was unexpected. Nevertheless, there is a lesson to be learned from the misfortunes of many Australians; it is essential to have an emergency fund.
Financial problems are not fun to think about. However, not being prepared for a new crisis would be worse. Have 3-6 months of living expenses spared so you can prepare for unforeseen circumstances like unemployment and repairs.
While it’s not possible for everyone, it’s a worthy goal to aim for eventually. Even if you save as little as $25 a month, it’s better than having nothing.
5. Start investing your savings
Once you have deposited a considerable amount into your savings account, you should start weighing the best investment options. It can be tempting to jump on the latest Bitcoin or Gamestop bandwagon. However, as a beginner, you should start small. Establish precisely why you want save and develop a strategy that matches your goals.
Once you have learned and familiarized yourself with conventional investing, you can dip your toes into digital currency. However, since it is incredibly volatile and loosely regulated, you should only allocate a small portion of your investable assets.
6. Spend within your budget
FOMO can cloud your judgment because it can lead to frustration and fear, which can propel you into unnecessary spending. Be aware of the role of these emotions in your motivation to spend.
The best way to counter these emotions is to plan ahead to spend what you missed out on during the pandemic. Depending on your budget, allocate an amount and limit yourself.
Spending within your budget will help you resist the urge to pay on credit. The last thing you need is to go into more debt.
Although everyone’s financial situation is different when you come out of lockdown, chances are you have adopted good financial management practices that you would like to maintain after the pandemic. With these pointers in mind, it is entirely possible.
This article does not necessarily reflect the views of the editors or management of EconoTimes