While we’re all dealing with the impact of the COVID-19 pandemic the concerns of our physical and emotional health grow every day. And to add to the stress, there’s also the economic impact to worry about. Let’s discuss ways of stretching your money during times like this.
Even if you are fortunate enough to have not lost your job and livelihood, observing the uncertainty can provoke a great deal of anxiety. Fortunately, there are things you can do now to stretch your existing funds and provide a small cushion for the future.
5 Ways to Cut Costs
Changing your spending habits can go a long way to making you feel secure and stretching your money. Adopting a new habit is much easier when you know why you’re doing it. An uncertain future can be a good enough reason to cut back on expenses.
The extra cash will help you and your family better weather out the time spent in quarantine. When things return to normal, the extra savings may be motivation enough to stick with those habits. Read on for some ideas on where you can start to cut back.
1. Get rid of unnecessary subscriptions
While most gyms are putting accounts on hold, it’s a good idea to check that you’re not getting charged until you return. Similarly, subscription boxes for clothing and makeup are not of much use when you’re cooped up at home. Rethink your subscriptions, at least until the end of quarantine.
2. Plan and cook meals at home
The one thing most of us are permitted to go out and do is shop for groceries or pick up meals. If we use these events as opportunities to impulse buy, we’d be spending money unnecessarily.
Use the time in quarantine to learn to cook healthy. Budget for a reasonable number of takeout days a week, so you look forward to it. Saving $40 on a restaurant meal adds up to a significant amount over just a few weeks.
3. Plan frugal fun
It’s the perfect time to connect with your family or spouse without having to plan a epic event that entails spending a lot of money. Creative quality time can cost close to nothing and still be fun. Do yoga together, plan a game night with homemade snacks, or have a cocktail hour at home.
4. Look at your bills
We often pay more than we should for services such as the internet, mobile service, and so on. Use the time in quarantine to call up your service provider and ask for a better plan. Many providers will eventually give in if you promise long-term loyalty.
5. Defer payments to financial institutions
Many companies are providing financial relief for obligations like loans and credit card debt. Contact your financial institutions to see if it’s offering options for deferment of payments.
Be sure to ask about interest rates and due dates. While deferring payments may sound like a good idea, if the debt is accruing compounding interest then you’ll end up paying more in the long run, the opposite of stretching your money.
When you’re just starting, set achievable targets for each week and give yourself a small reward if you meet them.
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8 Budgeting Tips
Once you have mapped out areas that could do with some cost-cutting, a budget can be a powerful tool to reach short-term and long-term financial goals for stretching your money. Here are the points to consider while building your budget:
1. Have a specific goal in mind
Be clear about why you are budgeting and what you want to get out of it. It helps to attach a numerical value to this.
2. Prepare accurate data for your expenses
Before finalizing your budget, it is advisable to track your expenses over a month. Don’t forget irregular expenses, such as repairs or renovations.
3. Prepare accurate data for your income
Similarly, understand your income sources. This doesn’t just refer to your salary. Make sure you know the exact amount you bring home, as this figure will be used as a base for your budget. Factor in income taxes as required and other cuts that affect your take-home income.
4. Keep track of actual spending against budgeted spending
Make a note of what you spend daily against what you expected to spend. This will help you ensure you are keeping to your budget. Besides, it will also help you revise your budget as you need to.
5. Be realistic
Small steps over time are what lead to results. If you decide you’re going to live like a hermit from the day you prepare your budget, it won’t work. Reducing your entertainment spending by half instead of cutting it completely will become a habit over time. You can pick up new goals when these become second nature.
6. Set achievable short-term goals
When you’re just starting, set achievable targets for each week and give yourself a small reward if you meet them. For example, an ice cream pint if you cook dinner five nights in a row instead of any take-out. Of course, don’t let spending on the reward derail your saving efforts.
7. Be flexible
There will be lots of moments as you make and live with your budget that you notice some element that is not right. Don’t abandon your goals. Just make the adjustments you need to and get back on track. It’s part of the process and it happens to everyone.
8. Be critical of new spending
Perhaps a new expense crops up that was not budgeted because you’ve never had it before. It’s particularly important to be critical of fresh expenses. There are lots of things we can do without or can create makeshift versions of at home. This frame of mind is particularly important when you are trying to save money during the quarantine.
While adjusting to your new way of life, remember to be flexible, take small steps, and stay positive when stretching your money and expenses. At Quotacy, we understand the importance of being able to provide for your family, which makes life insurance essential for keeping your family’s life in balance.
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This article is for general educational purposes only and is not written by a financial advisor. Contact Quotacy if you have questions.
About the writer
Director of Creative Strategy
Greg is Quotacy’s Director of Creative Strategy. He has an eclectic past from working on movie scripts to creating ad campaigns for major brands. His love of creative solutions drove him to strategy, and he now uses his powers to help families protect their loved ones. Outside of work, Greg spends his time off the grid hunting, fishing, camping, biking, hiking, and walking his dogs.