2020 has been an unprecedented year, with many people facing challenges they could never have imagined. One of those challenges has been the financial strain that comes with the pandemic, which has seen job losses, reduced incomes, and a general downturn in the economy. It’s more important now than ever that we start to practice good money-saving habits in order to make sure our finances stay secure.
Here, we have compiled our ultimate guide to saving money during the pandemic, so that you can stay on top of your finances despite the challenging circumstances.
Making a Budget
The most important step in saving money during the pandemic is to create a budget. This will help you figure out how much money you can comfortably afford to spend each month, so that you can make sure you don’t overspend. It’s useful to break down your budget into different categories, such as rent/mortgage, food, bills, transport, and savings. Generally, your total monthly expenses should not exceed 50–60% of your income each month.
Set a Savings Goal
As part of your budget, you should also set yourself a savings goal. This could be saving a certain percentage of your income each month, or a certain sum. Knowing what you are aiming for will make it easier to stay disciplined when it comes to saving. You should also try to set aside a certain amount each month for a rainy day fund, so that you have some money in reserve in case of an emergency.
Smart Shopping Habits
It can be easy to get carried away when shopping, but during the pandemic it is important that you are mindful of how much you are spending. A good way to do this is to make a list before shopping and stick to it, so that you don’t get tempted by unnecessary items. It’s also a good idea to compare prices between different stores, and look out for any promotional offers or discounts.
Cancel or Reduce Subscriptions
Many of us have subscriptions to things like Netflix or Spotify, which don’t seem like much on a monthly basis but can quickly add up over time. During the pandemic, it is a good idea to take a look at all of your subscriptions and consider which ones are necessary. If there are any that you don’t really use, it might be a good idea to cancel them or reduce their cost.
Take Advantage of Payment Deferrals and Interest-Free Periods
One way to save money during the pandemic is to take advantage of any payment deferral or interest-free offers that are available. Many banks and lenders are offering payment holidays and interest-free periods, which can help you to manage your finances better. However, before you take advantage of any of these offers, make sure that you read the fine print so that you know what you are agreeing to.
Cut Down on Non-Essentials
Our lifestyles can also have an impact on our finances. One way to save money during the pandemic is to look at your spending on non-essentials, such as dining out, going to the cinema, or buying expensive clothes. While it’s important to treat yourself every now again, although if you’re trying to save money during the pandemic it’s a good idea to cut down on these non-essentials.
Use Online Banking Tools
Technology has made it easier than ever to manage our finances. There are lots of online banking and budgeting tools available that can help you to manage your money more effectively. You can set up regular transfers to your savings accounts and also use financial tracking tools to see where your money is going each month.
Look for Government Aid
Another way to save money during the pandemic is to look for any government aid that may be available. For example, the Coronavirus Job Retention Scheme can help businesses cover their staff’s wages, and the Self-Employment Income Support Scheme can provide financial support to those who are self-employed. There are also other initiatives such as the Coronavirus Business Interruption Loan Scheme which provides loans to small businesses, and the Business Grants Scheme which helps businesses to pay their rent.
Look at Your Tax Structure
With fewer people working as a result of the pandemic, many employers have reduced their staff’s hours or wages. As a result, it is a good idea to review your tax structure to make sure you are taking advantage of any tax breaks that may be available. For example, if you are currently paying tax at the higher rate, it may be worth considering whether you should move to the lower rate which can help you to save money in the long run.
Reduce Your Energy Bills
It’s also a good idea to look at your energy bills during the pandemic, as many of us are spending more time at home and as a result, may be using more energy than usual. There are several things you can do to reduce your energy bills, such as switching to a more energy-efficient provider or installing energy-saving devices in your home.
Selling Unwanted Items
We all have items in our homes that we no longer need or use, and during the pandemic it is a good idea to go through our belongings and see what we can sell. There are lots of online platforms these days where you can easily sell unwanted items and make some extra cash.
The pandemic has been a difficult time for many people in terms of their finances, but there are ways to help manage the financial strain. By setting a budget, setting a savings goal, and taking advantage of any offers or government aid, you can stay on top of your finances during the pandemic. Following the tips above can help you to make sure that you save money and have a more secure financial future.
