The stresses of 2020 will have put a significant strain on many people, not only mentally and physically, but financially, too.
It’s time to tackle your finances tactically and practically.
It can be tempting to bury our heads in the sand in a way of getting through each day, but this will lead to overwhelm and further issues down the line.
These tips will help you feel more in control and able to manage your finances in a crisis.
Avoid new debt where possible
If you spend more than you earn, live pay cheque to pay cheque and have to borrow to pay it off or fill the gap then this debt could snowball and land you in bigger financial stress than you started with.
Have a proper look at your finances
It’s time to sit down and have a frank and open look at your finances – be accurate, be honest and know exactly what state your finances are in.
From here you can work out a plan to get out of debt or manage them so that you stay afloat in the ongoing crisis.
Start a budgeting document
Use a budgeting document to ensure you track all money in and out throughout the month and prepare for any big outgoings coming up during the year so that nothing comes as a nasty, costly surprise.
Use this insight to see where you can make savings and cut spending – the gym membership is a clear example, eating out, entertainment, beauty treatments. All of these have been taken out of our spending so use this excess money to save what you could have been spending and don’t re-direct them to other areas.
Always save your emergency fund first
This is your safety net of three to six months of your outgoings, should you become unable to work or lose your job.
This money needs to be easily accessible so not in investments or an account where you get charged for taking it out early.
Invest in yourself
Invest in yourself during this time. If you’ve been furloughed, this is an amazing time to do a free course to learn something new or train in something you never had the time to do, and then use these new skills once the world can open again to earn more money or do something you have a passion for.
Continue to save
This may be hard if you’ve lost your job or need to pay more out, but it’s important to keep building your savings to protect yourself from future financial issues.
Be aware of scams
Sadly, some fraudsters and scams will take advantage of people’s desperate situations so be hype-aware of these.
Never give details over the phone, or click links on messages – including unknown WhatsApp messages – and always tell them you’ll call people back if they pretend to be from the bank or your supplier.
Check in on any elderly relatives who may need help with this and talk them through how to add two-factor authentication to social profiles.
Check for Government benefits
Check for Government benefits that you might be eligible for – from the warm home discount, school meal vouchers and mortgage holidays.
Easy ways to curb lockdown spending
Depending on your spending triggers – emotional, boredom, stress, happiness, etc. the new lockdown could see some unhealthy spending habits arise so check in with yourself and acknowledge them when they happen.
- Unsubscribe from emails tempting you to buy
- Delete auto-fill payment info from websites
- Meal plan and don’t buy anything not on your list
- Shop second-hand to save money and help the environment
- Use an envelope system for spending
- Check your tariffs
- Sell your skills – such as music lessons over Zoom
- Go sim only rather than overpaying for a phone contact
- Make your own cleaning products – water + vinegar + essential oils works a treat
- Use up your beauty products before buying new
- Don’t order take away – make fakeaways instead.
Developing a frugal mindset now, while a lot of the spending choices have been taken from our hands, can be great for your future financial situation.
Don’t forget to head over to my blog, my YouTube channel and Instagram for daily money saving advice, tips and hacks for living your best life on a budget.
For more money-saving advice as well as chat about cash and alerts on deals and discounts, join Metro.co.uk’s Facebook group, Money Pot.
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