Managing finances have always been so important for us. It helps us control our expenses and walk us through tough times. And the most recent tough time the world has faced is Covid-19.
Not only this virus took lives but it shook economies. From big giants to individuals, everyone was upset about their finances. And since this virus is still here, we need to act smart and start managing our finances right now.
To help you out, I have highlighted some tips to manage your finances before the second wave of Covid-19.
Tips#1: Control Your Expenses
While you’re still getting an income from your job, it’s also important to manage your expenses. Managing expenses is part of managing finances.
Consider this; inflation act abnormally in such situations. Prices of everything change drastically. And so is the case with the prices of essential items. They even often change on a daily basis.
So to tackle this part, first, make a simple budget for the next month. You’d do this on a simple spreadsheet.
Spend your income only on items most important for you. These include shopping for groceries, paying the utility bills, house rent, and insurance premiums. These are some of the essential expenses and you can’t skip them.
Then when you’re going grocery shopping, make a list of items you need and stick to it. Also, try to buy in bulk from a cheap departmental store near you.
To manage your expenses, I’d also suggest skipping discretionary expenses. Don’t go buying clothes and avoid going out for movies. Spend time at home. This would not only reduce your expenses but would also save you from the threat of Covid-19.
Tips#2: Don’t Quit Your Job
While you might dislike your current job, it isn’t the right time to quit. Hold on to your job.
Earlier too many employees lost their job. Some got redundancy pay. And that helped them through a tough time. But many of them are still unemployed.
The current unemployment rate is 7.9% in the US. It was more than 14% when corona was at its peak.
So, quitting the job is not an option at the moment.
Even if you have to think of switching jobs, you need to be very clear about what the other job is going to pay you.
Prior to accepting that job offer, compare salaries, job position, company’s business, etc. And switch only if the other is better in every aspect.
Tips#3: Pump up Your Savings’ Account
You must be familiar with the famous 50:30:20 rule when it comes to spending your income.
Spend up to 50% on essential items. 20% goes straight into your savings accounts. And the remaining 30% left for discretionary expenses.
Following tip# 2, you’re already cutting-off unnecessary items from the list. So now you can reduce the percentage for discretionary items and adjust it in your savings account.
At least for a little while, make it as low as 10%. Adjust the remaining in your savings account. So, now you would have 40% of your income in your savings account.
Tips#4: Earn Extra
First I’ve talked about unemployment and now I’m talking about earning some extra. A bit controversial, right?
Though the unemployment rate is still high there are ways where you could earn some extra. One of the best ways to do this is – freelancing.
There are plenty of ways where you can work as a freelancer. You could be a freelance business developer or a freelance masseur.
The best freelancing jobs are, however, available online. You could join some freelancing platforms like ‘upwork.com’ or ‘freelancer.com’. There you could find plenty of jobs in a variety of interesting fields. Like you’d be a graphic designer, software developer, or even a business developer.
You don’t even have to work on a full-time basis. You could work on a part-time basis or on a contractual basis.
This is one of the best ways to earn some extra bucks while staying at home. According to a recent survey, 36% of Americans have switched towards freelancing.
Tips#5: Invest in Stocks
As it isn’t an expense but a way to earn in the future, you’d dive in. However, stock investing requires some knowledge. If you’re new to this, think of familiarizing yourself with the basics of stock investment.
One of the very basic tips I’ve learned is from Warren Edward Buffet. He’s of the view to invest in stocks you understand. For example, I like technology. So I’ve shortlisted a few companies like Apple, Microsoft, etc.
But there’s more to learn when thinking of investing in stocks. For beginner stock investors I’d suggest watching this YouTube video:
Tips#6: Investing in Forex
If you’re unsure about investing in stocks, investing in forex is easier.
You can start by understanding the trends on a daily basis. Then you also need to look into things that could directly or indirectly impact this financial market.
Forex trading is quite easy.
Making a Smart Financial Move
Now that you have a good head start, all you need is to start working on it right away. Start with the most important and easy tasks i.e. managing your expenses. And then move towards the tough ones like investing plans.
I’m pretty confident that your first task would add good value to your financial management. And you’ll be saving better for any rough time.