If you struggled with budgeting and managing your finances before 2020, then chances are your efforts were ruined during the pandemic. Don’t worry, however, because there is always the opportunity to drag yourself out of the situation you have found yourself in and to start saving and being money smart.
1. Know Your Financial Obligations
There may be repayments coming up and your benefits may be ending. The best way to start being money smart is to know exactly what you are in for. Some covid relief programs, for example, may need to be repaid. If you don’t repay them by certain dates, they can and will be taxed on top of it all.
You may also no longer be eligible for benefits, at which point you are going to need to factor that in.
2. Keep Debt Simple
If you are in debt,it’s important to simplify it. If you have many different creditors knocking on your door, consider consolidating the debt so that you can pay them all off and then only have one repayment to worry about.
3. Be Aware of Direct Debits and Subscriptions
Go through where your money is going and find all the direct debits and subscriptions you are currently enrolled in. If it is essential (for example, your rent or a fixed utility bill), then don’t worry about it. Otherwise, you should try to trim down as many subscriptions as possible during this time until you have enough saved up. For example, you only need one streaming service and can rely on free news sites instead of subscribing to media.
4. Set Yourself Budget and Spending Goals
It’s important that you start to build up a financial buffer for yourself. Start small and then keep increasing it. $100 to start. Then the next one at $500. If you don’t trust yourself not to spend it, put this money in a savings account. It will start to collecting interest, and you can make money that you need to have as a backup.
Try to figure out the best way to reach these goals. At the start, you will want to try to save up as much as physically possible, just to give yourself that initial buffer. To do this,you’ll need to set spending limits for yourself. This can be a weekly budget, which will allow you to be a bit flexible in what you spend.
5. Ways to Save Money
There are so many ways to save money. You can buy in bulk at the start of the month, for example, and make that food work for you throughout the month or months (for example, if you buy a 5kg bag of rice). Shopping second-hand is another great way to get the items you need (and just want). Décor, clothing, and other basics can easily be purchased second-hand either from your local thrift store or online.
Getting on top of your finances mostly means being aware of your obligations and where your money is going. With those two bits of information, you can adjust your lifestyle to help you save and live comfortably.