6 tips to stay money smart through COVID-19 and beyond
If you have felt the economic impact of COVID-19 then it might be a good idea to take a closer look at your finances. We have 6 tips to help.
One of the biggest impacts most of us have felt from the COVID-19 pandemic is the financial impact on our day-to-day life. The government’s stimulus packages have helped, but there are always ways to save and be money smart while still living a quality life.
Whether your income has been impacted by COVID-19 or not, now is the perfect time to reflect, review and see what you can do to improve your financial health. You may even nurture some good money habits that can benefit you in longer term.
6 tips to save money through COVID-19
1. Review where you money goes
The first step is to do a full audit of where your money is going. This means tracking what you actively spend, whilst also reviewing any automatic payments that come out of your account. Is there a subscription there that you completely forgot about, and you forgot to cancel?
MoneySmart has a great budgeting tool that can help you review where your money goes, as well as a how-to for creating a budget. You can also pull a list of direct debits that regularly come out from your bank accounts and cards via your online banking — you may be surprised by how much you could save.
2. Shop around and switch to save
Once you have a grasp of where your money is going, you can look at whether you’re getting the best deals on everything.
Your circumstances are always changing which means there may be opportunities for you to get a better deal from your energy provider, telco, insurance or lender. Do a little research on comparison websites like finder.com.au, Canstar or Energy Made Easy and see what is available in the market.
You can then take that information back to your current providers to ask for a better deal, or switch to a new one.
3. Build new spending habits
It’s a great time to get into the habit of cooking nutritious meals at home. This way, when you do go out for a meal or order some takeout it becomes a treat or something special. You can find so many amazing recipes online these days or even check out your favourite chefs’ social media — they may be doing cooking demonstrations you can watch.
As restrictions start to ease, you can still work on building up new habits by literally Netflix and chilling at home with some microwave popcorn rather than visiting the movie theatre.
There are so many ways you can save when you get into good spending habits. It all comes down to needs and wants, and it doesn’t mean you can’t sometimes splurge a little and treat yourself.
4. It’s all about priorities
To be money smart also means knowing the difference between good debt and bad debt. Good debt is for assets that will appreciate in value, such as home loan. Bad debt such as credit card debt or debt from buy-now-pay-later services not only have high interest, but can also snowball into something larger if they’re not repaid timely. Try to prioritise and pay off as much bad debt first as you can.
5. Regular review
Just because you have done a review once doesn’t mean you shouldn’t do it again. Why not put a reminder in your calendar to do another audit and review in a few months’ time.
You may have more money coming in by then, so you can make adjustments to your plan accordingly. Or find a subscription you’ve kept but rarely used, so you can make sure your hard-earned money is always well spent.
6. Don’t forget to save
The Covid-19 crisis is an alarm bell to remind us of the importance of keeping some emergency savings aside and having regular saving habits.It’s the smartest thing you can ever do for your financial future. Even if it’s just $10 a month into a savings account, that will add up over time. As your income recovers, you can increase the amount you put aside and save.