Saving money for rainy days is hard. Saving money for future spending may be a little easier but it’s still really hard. Saving money in a pandemic…IS REALLY HARD! Although we know that saving money is important, when troubling times are surrounding us, the last thing we want to think about is saving money for the future. We want need money now! If you haven’t started saving for an emergency fund (something we will discuss further in a future post) then that money is even more precious.
Pandemics Create Chaos
If anything is to be learned from the COVID-19 pandemic, it is that pandemics create chaos. It is often said that those with “forward thinking” (i.e. planning for the future) can endure even the toughest of times and it is absolutely necessary when the world around us appears to be crumbling down. Turn on the TV (or it may be best to leave it off), flip on the radio, or follow your preferred social media influencer and you are likely to hear about the turmoil facing your city, state, country, or world. During these times where do you turn for emotional and physical security? Is it the media outlets? The stock market? Family? Religion?
Those who are ‘forward thinking’ can endure through even the toughest of times.
Creating a Budget
So what are we to do? First, we must plan ahead by setting some goals through the creation of a budget. Every January, a common practice is to establish some resolutions for the year and it may include starting a diet, increasing exercise, or learning a new skill. We believe that setting goals through the creation of a budget should be at the top of that list. After all, if we know how much money is coming in and how much money is currently going out, we can make some small adjustments and set money aside for what we want. Budgets should not be boring and is the way that we can tell our money where to go instead of our money telling us where it’s going!
Here are a couple of FREE budget templates to get you started.
Prioritize, Prioritize, Prioritize
Assuming we are creating a budget and telling our money where to go, prioritization is a must have! Again, knowing where our money is going will guide us on knowing how to prioritize the next steps.
Priorities include:
- Food
- Housing (rent or mortgage)
- Utilities (water, sewage, electric, gas, etc.)
- Basic clothing
- Transportation
- Everything else…
During a pandemic our needs and priorities may change, but these top 5 will always be listed. If you need to take a break from saving money (minus your emergency fund) or investing, then we must decide to redirect our money in other directions. If we need to pause from making payments on credit cards to keep the electricity on, then we contact the credit card companies and notify them of this. If money is left over after all other money has been allocated to these 5 categories, then that is the money we should begin setting aside for our emergency fund (i.e. “Rainy Day Fund”).
PLEASE NOTE: this is not a free pass to then use money previously allocated to paying off your credit cards as free spending money for eating out, going out with friends, or buying other non-essential items.
Simplify and Save
After we have budgeted based upon the priorities the last step is to simplify and finish saving. As the image above says, keep it simple. This doesn’t need to be rocket science. Simplifying our lifestyle allows us to see through all of the “noise” in our lives, but simplifying does not have to be extreme (minimalism). It may be as simple as using a money spending app, like Mint or YNAB so you can visually see where excessive spending exists in your life and adjust accordingly. Additional ways you can save in this pandemic include:
- Trimming the Excess Spending: Make a list of all monthly subscriptions and evaluate which ones you would like to keep versus which ones you could afford to live without.
- Refinance Your Mortgage: You may be surprised to find some opportunity based on how much money you have contributed to your principal or your homes’ current worth. Refinancing other loans may be an option (we do NOT recommend debt consolidation, however).
- Shop for Better Deals on Insurance: Less travel in this pandemic may qualify you for low mileage discounts that previously was not possible.
- Sell Some Stuff: Seeing people first hand can be rewarding, yet virtual yard sales or selling through online websites (i.e. facebook marketplace, eBay, PoshMark, Backmarket, etc.) are excellent ways to sell your unwanted stuff and make some extra money.
These are just a few ideas for Saving Money to Make Memories. What are some ways you have saved money in this pandemic?