Cut back on discretionary spending
Discretionary spending is every expense that goes beyond your essential needs. Housing costs, utilities, basic groceries, medical, insurance and transportation are all essential expenses, and they need to come first when the future is uncertain. No matter your employment status, no one can predict how the economy is going to affect us, so even cutting back on one or two non-essentials will help build up your nest egg, especially important during this time.
Review your budget and look ahead
Your pre-covid budget might not match your current circumstances for any number of reasons. We tend to notice areas where we’re saving and not notice the places where we’re spending more. While working from home might be cutting down on your transportation costs, you might have also taken a pay cut, so make sure that your budget reflects your true circumstances. And during these constantly changing times, keeping the budget flexible and reviewing it even more regularly than normal is important.
Take a look at your priorities and see how they’ve changed
Were you saving up for a big trip? Saving to send the kids to sports camps over the summer? Those things might not be happening now, and you need to decide how to manage the money you’re saving while managing reduced income and higher essential expenses as cost of goods rises. Take a look at your priorities and decide how to manage your money in the face of the ever-changing future.
Learn a new skill that can take one expense off your list
Take a look at things you spend money on and see where you can learn new skills to “Do-It-Yourself” and save money! Making gifts, learning to tailor or sew to update your wardrobe, even making your on soaps, masks, and other new “essentials” are all great ideas to save money – and maybe even earn a bit on the side.
Looking at where you spend money – spa trips, nail salons, home improvements and so many other areas are all chances to up your own skills and save a bit of money.
Give yourself a financial health check
We’ll be talking more in-depth about financial health checks in future blog posts, for right now, it’s enough to focus on the basics. Financial health means that you are following a realistic budget that suits your lifestyle, living within your means, rarely using credit – and having a plan to pay it back when you do, saving money for emergencies, avoiding impulse buying, and only having 1-2 credit cards.
Finding some areas needing adjustments? Now is a great time to start making small changes to your financial life to come out of this even stronger!