How to Manage Your Money During This Crisis:
Little did we all know what was in store for us, while we sipped on our coffee at our favorite cafe, or strolled down the beach, or even bought our usual supply of groceries, last month. Of course, we heard about Coronavirus, but it sounded like a distant tale from the land of nowhere. We weren’t expecting the entire world to be caged at home within a span of one month, let alone think about the possibilities of lay-offs, salary cuts, a falling economy, etc.
But today, everything is as real as it can get. We are all going through a hard time together. The younger generations who were in the process of making their mark in the world, independently, have also been hit hard. But this is just another challenge in the game of life, and a little calculation and planning will enable you to overcome any problem that may be thrown your way, just like this one.
Here are a few tips on how to stay afloat financially, so that you have the space to keep moving ahead in all other areas of life:
1. Budgeting is the way to go
Although budgeting may seem insignificant, it is actually the best place to begin. Do not fear, it does not bite. By calculating your expenses and bills, you get a clear picture of where and how you spend your money. This enables you to understand where you can cut down and save some money. It also helps determine how much money you need in your emergency fund for future emergencies. Following a simple budgeting plan, can also go a long way in organizing your finances.
For example, the 50-30-20 budgeting rule, wherein you spend 50% of your income on necessities and bills, 30% on your wants, and 20% are kept aside as savings. Let’s all stop fidgeting, and do some budgeting already!
2. Trim down your expenses
One obvious and simple step to follow is to cut down your expenses as much as possible, to save as much as possible. What seems like trivial things, may ultimately result in large savings at the end of the month.
- You could begin with making efficient use of your electricity – turn off your fans, lights, and other electronic devices when not in use.
- Use the timer on your air conditioner to turn it off when the room has reached the ideal temperature.
- Stop purchasing things online on impulse, such as on make-up, clothes, shoes, gadgets, etc, which you may not need right now.
- Do your own laundry and cleaning to avoid extra expenses every month.
- Begin cooking at home. You might be surprised by the amount of money you will save when you stop ordering food from restaurants.
- Unsubscribe from any memberships that you aren’t using, for example, your old gym membership, or a streaming site that you may not be using, annual magazine subscriptions that don’t deliver anymore, etc.
3. Pay attention to your bills
Do not neglect your bills and monthly payments to avoid additional expenses. Whether it is your credit card bills, or your rent, or electricity bill, most of them have a deadline. In times of crisis, we tend to overlook or forget to make several payments. But the truth is, it is more important to track these bills and pay them on time. Most of these payments charge a fee for late-payments and hence, could add significantly to your expenses.
Fix a date twice every month to review all your bills, or set reminders well in advance to remember to close all your accounts on time.
4. Maximize your non-cash assets
Here we refer to all those coupons and benefits you may have already paid for and haven’t claimed yet. It could be your food coupons or discount vouchers on your groceries, gadgets, or other essentials, rewards from your credit card, gift cards, etc. Though not all such assets may not be valid now due to the ongoing pandemic, there may still be some that can be used. All these assets will contribute to reducing your expenses, but only if you use them wisely.
5. Earn some extra cash
It is easier said than done. But honestly, in today’s global era dominated by the internet, we have to admit that it is actually way easier than it looks too. There are various little things you can do to earn more cash, apart from your usual source of income. Here are a few tips:
- Freelance. We’ve all got some sort of skill that someone else hasn’t. It could be writing, tutoring, languages, designing, typing etc. Log on to websites such as Fiverr, Upwork, etc., where you can register for free. It is a great time to make extra cash as we have more time on hands, cooped up at home.
- Declutter your home. There are plenty of things at home, which might be in great shape, but aren’t being used. Sell them on second-hand websites to make some quick bucks from home. OLX, Quikr, etc., offer you the platform to do this.
- Review your credit cards/ insurance deals. Switch to the card that gives you maximum benefits for the best prices. Do some research and make the most of your credit card while you are at home. If you have insurance, apply the same technique to save a few bucks on a monthly basis.
6. Laws of investing
So in contrary to what many believe, investing should not be completely out of the picture right now. Bear markets or a falling stock market is a great time to buy. When the market is falling, most people tend to panic and sell their shares. The stocks and their valuations are at an all-time low. Therefore, if you have some capital or money lying around that you can spare at the moment, this is actually a great time for you to make some purchases in the stock market. It will definitely pay-off in the long run when things get better. It is advisable to make your purchases after proper research or with the guidance of those with some experience. The key is to not panic and wait for the bad times to pass before you make gains out of your investments. You will most definitely thank yourself later.
7. Don’t forget routine maintenance
Another very important tip is to not ignore your usual maintenance routine. Your car or bike, your home, your gadgets, etc. need to be cared for in times of a crisis too. Ensure you start your vehicles once in a while and warm up the engines. You could even give it a good wash and oiling at home. Make sure you do the basic cleaning of your air conditioners, refrigerators, mixers, etc. at home to minimize wear and tear. Finding people to service your equipment might be hard during times like these.
Hence, continue to carry out your basic maintenance routine. Most importantly, take care of yourself. Though it is a hard time and relaxing is not even in our dictionaries for many of us right now, we must believe that this too shall pass. Try and strike a balance between working from home, and taking care of yourself. Eat healthy meals and do some forms of physical activity, along with pursuing some hobby that you like, in your free time. All this will ultimately add up to your productivity by keeping you at the top of your game mentally and physically.