Whether it’s health, social, or financial restraints, the Covid-19 situation is taking a toll on all of us. With businesses cutting expenses and clients reprioritising (or reducing) their budget, many might find them suddenly unemployed or suffering a huge pay cut. That being said, here are some money tips to help us through a financial crisis.
Figure Out Your Budget – Then Slash It
And we do mean, slash it. If you do not know where your money goes monthly, it’s time to start tracking and analysing. Some of the biggest “small expenses” include transport, dining out, mini purchases online and subscriptions.
Start by going through your transactions and analyse where you spend your money on. Afterwhich, categorise them into must-have expenses (eg. basic groceries, healthcare, utilities, debt payment etc) and nice-to-have expenses (eg. food take-out and delivery, entertainment subscriptions, flash sales etc).
You might find it hard to resist the urge to #TreatYourself during such troubling times, but remember – “tough times never last, but tough people do”. Plus, the reward would feel so much more fulfilling when you don’t have to scrimp for the next few weeks.
Get Creative With What You Have
Recession or not, it’s always fun to get creative with how you can make extra money or save. Once you’ve set aside for the essentials – housing, transportation, utilities, and groceries – ask yourself these questions to see if you can stretch your dollar:
- Do you have a spare room you can rent out
- Do you have skills that you can teach (online) or freelance?
- Do you have items you can sell?
Another great idea to maximise household income is to set aside a daily budget for all family members to abide by. Make it a friendly competition to see who gets the most value with that budget and set an incentive (eg. The winner gets a hall pass on house chores for a week).
Deal With Debt
While it’s easy to simply ignore overdue bills and debt, it will only get worse if you do not handle your debt. Whether it’s student loan, mortgage, credit card debt, the interest rates might cause you to suffer more later. Prioritize credit card debt, then turn to other types of loans, such as mortgages or auto loans; and more importantly, try not to take up a new loan to tide through.
Sharpen Your Skills
If there is one investment you’d want to make during a recession, it is to build your skills. Jobs become so vulnerable during a financial crisis that you would want to stay relevant and valuable. Check out in-demand skills and take up a course that could help make you a better fit for companies. With lots of free online courses available and the extra free time, why not deepen your expertise?
Take Care of Yourself
Take care of yourself to avoid getting unwell. Other than incurring additional medical fees, falling sick requires you to rest up – and that takes time away from finding a new job, upskilling yourself, or being your best productive self. Yes, times might be tough but your health and mental well being stays the utmost priority any day.