Having full control over your finances is never an easy task and is constantly on-going. But keeping tabs on your financial health has become a lot more difficult this year as the COVID-19 pandemic has gripped the world.
Millions of people have been abandoning their financial plans and avoiding future planning altogether because budgeting has become complicated. There are still many financial products out there for people that are struggling, such as credit cards, guarantor loans, and personal loans. And there are some simple actions that you can take to get your financial budgets in order.
Ready to take control of your finances? Read on!
Establish Your Spending Number
No matter how much money you earn, the chances are that you don't enjoy setting yourself a monthly budget. But a simple way is to recast how you think about budgeting. Rather than taking every single pound into consideration, you would be far better off if you were to simply set a number of what you can safely spend each month, no matter where you are.
Cancel Any Unused Subscriptions
A lot of the time, the task of planning your budget feels too big, but the trick is to break down what you're trying to achieve into much smaller chunks. This method of organizing your finances is known as snowballing and has become popular because it's a great way of eliminating debt. But it can be applied to budget planning more broadly.
The easiest and more effective way of doing this is to go through our bank statements and find the small recurring charges that you no longer need and then cancel them.
Consider that Netflix subscription that you don't actually watch or cancel any travel insurance policies. You could even call up your bank to see if you could downgrade your credit card to one that doesn't come with monthly fees.
Put The Money Away That You're Not Spending
With many places closed to the public, the chances are that you're spending less money now compared to what you were before the pandemic took hold. You may feel like you're a little bit bored, but having fewer ways to spend your money is certainly a good thing for your financial health. Since you're saving this money, put it away into your savings instead of shelling out on premium products when you go to the supermarket.
Create An Emergency Fund
One of the most important things you can do right is to create an emergency fund. This should consist of enough money to live on for 3 to 6 months and should be kept in your savings accounts. You may want to put away as much as you can since we don't know how it will take for the economy to recover. Because of this, we can't be sure of our future incomes at this present time.
Look Into Additional Part-Time Work
Although there are millions of people struggling with their finances at the moment, the economy is slowly making a comeback, so there are opportunities for you to supplement your primary income. If your hours have been cut by your employer due to a lack of customer demand, this could be a good time to consider a part-time job.
If you have enough money to cover your rent/mortgage and your essentials, then this extra cash can be added to your emergency fund that you don't touch unless you absolutely need it.
Most Importantly, Keep Yourself Safe
The most important to remember is that we are still in the middle of a serious health pandemic, so it's paramount to ensure that you keep yourself healthy so you can continue to work and earn money. Although the UK is taking huge precautions as businesses reopen, you'll also want to take your own steps to keep you and your loved ones safe.
Money is well and truly tight during these unprecedented times but tries not to let this get you down. Follow the steps we've discussed in this article and try to keep calm. You'll get through these tough times.