The global pandemic of Covid-19 has not only taken a toll on the lives of numerous people all over the world but also has immensely affected the global economy and personal finances. And sadly, all these are most likely to continue for quite some time now. In these hard times of layoffs and pay-cuts, some of the most genuine concerns are ‘How do we manage our finances?’ and ‘‘how do we save money?’.Though taking the first step is always hard, once you get started, things become easier to handle and it’s more convenient if you are aware of your spending habits.
- Monthly Budget Plan
A monthly budget is one of the most crucial tools for effectively managing money by allocating it to your necessities and priorities. There can be some room for your entertainment & recreation as well. You can organize your financial limitations more efficiently if there’s a budget based on your income. Budgeting not only helps to make an outline of your spending habits but also helpful in foreseeing future financial vulnerabilities.
- Maintaining Expense Sheet
The first thing needed for maintaining the expense sheet is to figure out the expense heads. Start recording your daily expenses under respective heads. The overall sum total and also that of the individual heads, at the end of the month, enables you to compare with the previous months; you can see when you overspent and why and it’ll help you come up with a revised (better) plan for the next month. Always compare your budget with actual expenses. It helps to keep an eye on your spending habit and stay focused.
- Knowing the difference between wants and needs
Another important point is to know the difference between what you want and what you need. In these crucial times when there’s uncertainty over financial viability, you better cut down unnecessary expenses and spend only on your utmost necessities.
- Move unspent money to Savings Account
At the end of each month, the money you save should be transferred to a savings account and be sure not to incur any expense out of it unless it’s an emergency. That way your savings would eventually grow and the plus point is you’ll even get good interest from your bank.
- Look for quality and not merely brands
Often we tend to get swept away by brand promotions but what we really need to do is check whether a similar quality is available in the market for a cheaper price and if so, we should definitely opt for the cheaper one.
- Cancel unnecessary subscriptions
One more vital point would be analyzing your subscriptions and paid memberships from time to time and canceling the ones you can do without.
- Impulsive shopping
Sometimes to uplift our moods we think shopping would be the best solution but little do we realize that it’s nothing but a temporary distraction and we end up being more frustrated. So impulsive shopping is a big no if you don’t want to see yourself in a financial crisis.
- Panic buying
Under the current scenario some of us start speculating the future probable circumstances and start panic buying unnecessary stuff that not only results in scarcity of resources but also burns a hole in our pockets. Therefore, staying calm is what is needed.
Image taken from Here https://www.flickr.com/photos/gotcredit/45832410955/sizes/z/