Taking Care Of Your Finances Amidst A Pandemic

Posted January 8, 2021 by in Lifestyle

2020 was a difficult year for everyone thanks to COVID-19. The world saw hundreds of thousands of lives lost, millions of businesses and jobs down the drain, and the economy of the entire world plummet. Now more than ever, looking after your finances is essential, and whether or not the pandemic affected you financially, you may be looking for ways to better take care of your money. Want to learn more? Take a look at this guide on how to take care of your finances amidst a pandemic:

The first step to looking after your finances is by looking at your incomings and outgoings, and knowing exactly when owed money will be taken out of your bank and most importantly, how much money you have left over at the end of the month. While you may have an approximate figure in your head, knowing exactly – and making note of it should you need to – will help you look after your finances without second guessing yourself.

Mortgage Refinancing

If your mortgage rates are sky high, and you’ve found yourself in a position where you’re worried about being able to make payments each month, this can be very distressing. Whether it’s because of a change of circumstances like the loss of a job, or an unexpected bill, not having enough money to pay the bills and live comfortably is extremely stressful.

In times like these, you may consider refinancing your mortgage to help free up more money to spend elsewhere. Refinancing is where you find a new lender to pay off your mortgage, and replace your current mortgage with a new one – ideally with much lower rates. You can use this refinancing calculator to work out how much money you could free up each month. This may mean your repayment terms are longer than before, but it could save you a lot of money upfront and free up some of your money to spend on other essentials.

On the one hand, you must be aware of another cost involved with mortgages and refinancing a home that often goes unnoticed. Know your goal and other factors that might contribute to helping you out paying your new loans, such as Rates Vs. The term, the cost of refinancing, and your breakeven point.

Budget Cutting

When money is tight it can be difficult to see a way out. You’re wondering how you can make more money quickly so that you can afford to live comfortably. However, quite often, some simple budget cutting can make the world of difference without losing out on everything you love. Here are some budget cutting tips to free up some of your hard earned cash:

  1. Go though your outgoings. As mentioned earlier, knowing exactly what goes out and when will help you take control of your finances. You may find that you’re paying for services or subscriptions that you no longer need or use, or perhaps that you’d completely forgotten about! Take the time to understand everything that’s going out of your account, and eliminate anything you don’t need, want, or use anymore. This might be a magazine subscription or a forgotten about gym membership. It might not seem like much, but every penny you free up will count.
  2. Track your spending. Much like calorie counting, it’s important to know whether you have spending habits. Track your spending over the space of two to three months to see if you can see any patterns in your spending. By taking the time to note down everything you’ve purchased you will become more conscious and think twice before making a purchase. Tracking your spending can also help with budget planning. For example, if you spend more money towards the end of the month, you can budget yourself to ensure money is available at that time of the month.
  3. Plan free days out. There’s nothing wrong with a little excitement in our lives, but when it’s costing an arm and a leg each time you want to do something nice, it’s simply not worth it. There are thousands of free things you can do either alone or with your family, so take a look at free days out to try before dipping into your budget.
  4. Avoid impulse purchases. We’ve all been there! You notice a deal on an item you’ve wanted for some time, and you’re so tempted to click add to basket….but stop! Sit back and think, do you really need this? Impulse purchases may feel great at the time, but when you’re struggling for money later on in the month, it can be quite distressing. Sleep on the decision, talk things through with your spouse, and if it still seems like a good idea the next day, then make your purchase.
  5. Buy generic at the grocery store. While this won’t be the case for all of your weekly food shopping, you can save a lot of money by choosing the supermarket’s own brand food. More often than not, the products taste just the same – if not better! Every time you go shopping, try swapping out another item for the own-brand version to see if you like it. If you do, save yourself some money to spend on other essentials.

Look After Your Credit Score

At some point or another, your credit score will be extremely important. Whether this is when you’re applying for a loan, looking to sell your home and buy another, or any other time you might need to borrow money, your credit score will affect the decision.

While it may not be important to you right now, looking after your credit score will really help you out in the future. Here are some tips on how to build your credit score higher:

  1. Pay your bills on time. Doing this shows trustability. Lenders will be able to see your financial history, including whether or not you pay on the agreed date. Do this as often as you can to continue building your credit score.
  2. Register on the electoral roll. Sometimes lenders won’t approve your application if they don’t know who you are. The more information they can find on you, the more likely they are to approve your loan.
  3. Take out a credit card. While this may seem backhanded, lenders won’t look at you twice if they don’t know whether they can trust you. This means, even if your financial history hasn’t been all that bad, if they’ve got no information on you, they won’t be able to trust you to lend to. Taking out a credit card can start your credit report. However, be careful not to overspend, and make sure you’re able to make the repayments on time, otherwise this could seriously damage your credit score.
  4. Use apps like Clearscore to help keep track of your credit score. Not only can you view this for free, but Clearscore can also give you tips and tricks on how to improve your credit rating. So, if you’re looking to apply for a loan or mortgage any time soon, you can use the app to check whether you’re ‘ready’ and the likelihood of approval.

You should also know about the different credit bureaus—including Innovis consumer assistance.

Making More Money

Life will always throw curveballs, and every now and then you may find yourself in need of some extra money, and it’s not as far out of reach as you might think!

Whether you’re looking for a fast way to make some money, or another regular source of income, look at these fantastic ways to make more money:

Do Some Freelance Work

This is an extremely fast way of making potentially a lot of money. If you’ve got skills that can be performed freelance style such as graphical design, content writing, or a keen eye for proofreading, then freelancing might just be the thing for you.

Use websites like Upwork to find freelancing jobs that, in some cases, can be completed and paid within a few hours!

Start Your Own Business

Whether you may not be able to dedicate all of your time to your side hustle, there’s plenty of money to be made through small businesses. Perhaps you’re great with crafts and set up an Etsy store selling your handmade goods, or maybe you can offer services to do in your free time? Either way, a side business will help bring in a steady income each month.

You can also make extra money by selling unwanted items, starting a blog, doing odd jobs for people such as mowing their lawn or cleaning their car, or even taking up a part time job to earn the extra money you need.

Saving Money

Saving money is essential in this day and age, and even if you can’t save hundreds each month, every penny counts. Many people struggle to save money, especially when their budget is tight enough as it is. However, you can turn saving money into a game or contest to make it seem like you’re not saving at all!

Here are some ideas:

  • A swear jar
  • Putting money away each time you make a non-essential purchase
  • Competing against your spouse to see how much money you can save
  • Using services like ‘change saver’ with your bank to save small amounts throughout the month.

As you can see, there are many ways you can take care of your money during a pandemic without having to go without.

Be safe and take care of your finances!

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*Photos by Karolina Grabowska