When the coronavirus was declared a global pandemic, many countries decided to close their borders as a primary counteractive step against the virus's further spread. Another preventive measure that was implemented was advising the people to stay in their homes unless they absolutely needed to go out.
Multiple public places are also forced to close for the meantime, including schools, malls, restaurants, and other business establishments. Due to this, the livelihood and income of many people were negatively affected. Money can be difficult during this challenging time, but it does not necessarily mean your finances should suffer.
Take note of the following tips because they can immensely help you save money during the pandemic.
Start and Commit to Your Budget
The very first step to take in handling finances is budgeting. To figure out your monthly budget, there are various tools available to help. These tools include online debt management and repayment calculators, financial planners and budget apps.
There are a lot of significant changes in everyone’s work and lifestyle because of the pandemic. That is why you can start budgeting by listing your new income and all of the things you currently spend on. You can either do this digitally or manually.
There are two (2) types of expenses:
- Essential Expenses. The type of expenses which includes rent, utilities, groceries, and transportation.
Due to the pandemic, most people have a work-from-home (WFH) set-up, meaning your transportation cost will be significantly lower, but your electricity bill will increase. You can also avoid dining in restaurants and opting to cook at home, meaning you can save on food expenses.
2. Discretionary Expenses. The expenses that do not fall into the essentials belong to discretionary expenses. It includes money spent on entertainment, shopping, vacation, online purchases, and many more.
Since your essential expenses are mandatory for you to live, you can save more by exercising control and financial discipline on your discretionary expenses. Budgeting allows you to track your money and watch where savings can be made. You can budget your salary weekly or monthly, depending on where you’re most comfortable.
Cut-off Unnecessary Expenses
Take control of your cash flow and cut out expenses that you do not really need. With the stay-at-home order, your gym subscription is basically useless so just discontinue it. Also, put an end to any of your unnecessary online subscriptions. With most establishments closed, you can keep away from eating out, shopping, and going out on vacation.
Avoid retail therapy and impulse buying altogether or as much as you can. If you want to buy something, adhere to the 24-hour rule. If you want something, but it’s not necessary, do not buy it yet and wait 24 hours. After the allotted time, if you still want the item, then you can purchase it.
Depending on your lifestyle, there are more things that you can avoid. Budget your salary accordingly and try to save more money.
Reduce Household Energy Consumption
Just because essential expenses are essential, it does not mean that you can’t decrease your energy consumption and save money. According to energy efficiency experts, the easiest way to reduce utility costs is by simply changing your light bulbs to LEDs. High-quality LEDs use 75% less energy compared to incandescent light bulbs, and LEDs can last 25 times longer.
Another practice you can make a habit of is setting your thermostat low and turning off the lights when you do not use them. Open up your curtains to let the natural light in instead of constantly keeping the light on. Also, pull out the plug of your unused appliances, such as televisions and fans, because they still use electricity even though they are not turned on.
What is mentioned above are only a few things you can do to lower your use of energy. You can conduct more research to improve your knowledge in saving energy more.
Learn How to Shop Smartly
The majority of your salary goes to food, and there are plenty of ways to lessen your food expenses. First, make a grocery list when you shop. Having a list helps you to buy what you only need and avoid any unnecessary purchases.
It is advisable to shop weekly rather than monthly. The food will be less likely to go bad because you will cook it in the same week you bought it. You can also save by buying items in bulk because they cost less compared to multiple purchases. However, bulk buying is different from hoarding, and you must avoid hoarding.
See to it that the items you buy in bulk do not perish easily, such as foods that can be stored in the pantry or put into the freezer. Another thing, just because restaurants are not available for dine-in, they can do take-out. Try ordering out less and practice cooking more for yourself.
Save First Before You Spend
There are a lot of people experiencing unemployment or salary cutbacks due to the pandemic. However, now is the perfect time to set up an emergency fund or a savings account. If you originally set aside money for travel and other non-essential things, it is better to put it into your emergency fund. Saving money to use in case of emergency is always beneficial in the long run.
You can also set-up an automated savings account with your bank, so you don’t have to manually do it. Decide early on how much of your salary you will put into your savings account. Set it aside, and then you can budget the remaining money to spend on your expenses.
Final Thoughts
The first news about the newest virus outbreak shook the world to its core. Many things have happened since then, and many lives have changed because of the coronavirus. Even more so, this dire situation should be a reminder to everyone why it is important to save money.
We never know what will happen in the future, which is why staying financially stable is considerably helpful. Even with the setbacks caused by the pandemic, knowing how to manage your finances wisely is a great asset towards a more financially stable future.
