If there is one small positive that has come out of the whole world being on lockdown, it’s that it has made us all think long and hard about what really matters to us. It has also been a real lesson for just how frugal we can be, when required.
Do we really need to buy take away food every day for lunch? Is a gym membership really necessary when we could go to the park and do stretches three times a week? Do we actually need an international holiday every year, or could we explore our own backyard some more? Is bread making really that hard?
So, while we’re all hoping that social-distancing measures will be relaxed in the coming months, maybe some things shouldn’t ever go back to ‘normal’.
If you’re looking to use the time in isolation to really get a handle on your money and undergo a financial glow-up transformation, here’s how:
- Create a budget
What better way to use your social distancing time than to whip your finances into shape and create a budget for yourself?
Start by figuring out how you are going to keep track of your budget – do you want to note it all down in a notebook or are you a spreadsheet lover? Maybe you want to get techy and download a budgeting app? Whatever you choose, make sure it’s something that works for you.
Next figure out a timeframe for your budget. Do you want to work out your budget monthly or weekly? This will usually be determined by how often you get paid.
Then think about what expenses you can’t change and what expenses you can. For instance, rent or home loan repayments may be something you can’t change, but you could switch to a cheaper mobile phone plan or review how much you spend on takeaway food.
Once you’ve reviewed all your outgoings, it should be easier to work out where you can cut back and what kind of budget you can, realistically, stick to.
- Rejuvenate your savings stash!
With COVID-19 stretching economies all over the world, now is as good a time as any to set yourself up an emergency savings fund.
This is exactly what it sounds like – an extra pot of money, put aside for a rainy day. It’s useful to have so that if you do find yourself in a financial crisis, you don’t have to resort to taking out a loan or relying on a credit card to see you through.
So how do you get into the habit of stashing your cash? The trick is to pay yourself first. Set up an automatic transfer from your everyday account to your savings account, timed to go out immediately after you get paid. That way you’ll be less tempted to hit the shops and spend all your hard earned money straight away.
- Review your household expenses
One of the traps we often fall into in our usual 9 till 5 lives is that we’re always too busy or too tired to review what we’re actually paying for when it comes to household expenses. So while life is a bit slower it is a good time to review all of your outgoings.
In fact, this is something that you should probably get into the habit of doing every 12 months, to make sure you’re still getting the best deal on all your services. Areas for you to review and possibly save some money by switching include:
- Energy bills, gas and electricity
- Internet and mobile phone bills
- Home and contents insurance policies
- Car insurance
- Loans and credit card repayments
You could even think about adopting some energy-saving habits while you’re at home, like washing your clothes at lower temperatures, line drying instead of tumble drying, switching off appliances and electronics when not in use and changing your old halogen bulbs for LEDs or CFLs.
- Cancel unwanted subscriptions
If you have any subscriptions that you no longer use then now might be the time to cancel them.
Think streaming services that you don’t use that much, cloud space you no longer need or even a job seeking website that’s no longer relevant to you. If you’re paying a monthly subscription to something you don’t use, then now is the perfect time to send out those emails or make those calls and save yourself a bit of money.
A quick look through your bank statements will help you to spot any outdated subscription services or odd little payments you’ve forgotten about.
- Brush up on your money know-how
To truly give your finances a glow up that lasts well beyond COVID-19, use this time to brush up on your general money know-how.
This could simply be refreshing your knowledge on finance terms, such as the difference between a fixed interest rate and a variable interest rate, or it could be understanding what different fees come with your transaction account or even your credit card.
If you know what fees you’re being charged and what interest rates you’re paying, you’ll be able to spot a better deal when you see one or be more confident in haggling for a better deal when it comes time to renew your accounts.
About the Author
As a money writer for financial comparison website mozo.com.au, Tara knows that finance can be a bit of a dry topic, which is why she’s made it her mission to make reading about money and banking more interesting for everyone. Tara is always looking to write informative content, so that ordinary people can make smarter decisions when it comes to money.