How to Plan Your Finances After a Crisis
This year has definitely changed the way many of us think about our homes, our work and how we spend our money.
For some this has been a boom time, if you produce or deliver food it could have been one of your best years. However for most, 2020 has meant job losses, furlough, uncertainty and deep thinking about what the rest of the year holds.
During or just after a time of crisis, it’s useful to reevaluate which areas of your life are important and what kind of life you want to live.
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Scarcity of food products has made us all make-do rather than have a surplus of everything. Maybe you’ve noticed that buying the latest fashion trends isn’t that vital. Are you enjoying your home more?
Perhaps this period has highlighted how unprepared you were for the worst-case scenario and you want to ensure that doesn’t happen again?
If you’ve realised that you need to fund your new life or improve your old one and managing your money is key to this transformation. The first thing you need to do is realign your budget.
How much cash do you need to save or how can you better your life by facing up to the real issue of your finances even if you find it too upsetting to think about.
How can you manage your finances during the Covid crisis? It’s an overwhelming thought. But it’s always good to know how to manage your money in a crisis.
Small changes can add up over time so don’t put your head in the sand. Try this personal budget planner so you have a starting point and then work through the steps below.
Here are our tips for healthy finances.
Avoid more personal debt
While it’s tempting to take out extra credit cards or loans. Although they may appear to offer initial solutions they normally just add long term stress. We all need a better strategy for our life and home which is sustainable.
So how do you plan for the future during a crisis? By literally taking action rather than inaction.
How do you manage your finances after a sudden job loss? With some real soul searching and motivation to change direction if needed should your industry be the hardest hit.
How can a personal financial crisis be avoided? By expecting that there will be one and thinking ahead so you are partially buffered by what might happen. Unfortunately, there will be other crises and we will all need to weather more of them. So it’s a case of being prepared so you survive it better next time.
How do you properly plan your families finances and what should you do in order to improve your financial situation? In each area of our lives, there is excess cash and spending which doesn’t necessarily need to be there. Obviously we all like little pleasures and treats and we want to live life as well as exist! But at times it’s actually quite satisfying to think you can take control and improve your financial situation for you and for your family
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Spending on food
During Covid-19 people’s attitude to food has been hard to watch. From stockpiling and then wasting to those who are really in need unable to get their food deliveries. It’s probably the first time our generation has had to worry about whether or not they could get something on demand.
We are very lucky we haven’t had to worry about this before. However, there are ways you can survive this time of hiked prices and empty shelves and still save money.
It takes a change of mindset. There will always be obvious products which everyone is buying in bulk. However, there are others very similar no one is touching.
Throughout the crisis potatoes and polenta were plentiful but pasta and rice sold out. Both of the first two are cheap and easy to add to any meal.
Buy the least obvious types and cuts of meat such as turkey made into mince, fillets and burgers rather than chicken.
Add tinned fish, vegetables and frozen varieties. These are often cheaper, keep for longer and get missed by those in the fresh food aisle.
Meal plan before you go out so you only buy what you need for the next two weeks. If you can get a food delivery slot only use it if the delivery ends up being free.
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Cost of utilities
Once you’ve carried out the budget planner above you will have seen exactly where you spend the majority of your monthly salary.
It can be quite eye-opening. One of the most costly outgoings is often the amount we spend on electricity, gas and telephone lines or the internet.
Take a look at some comparison sites for cheaper gas and electricity. If you haven’t moved provider for a while you should get some instant savings. Try to find one which has a smart meter as this only charges you for exactly how much you use rather than an estimate.
Go through any insurance products you may have. Some for example pet policies often don’t cover enough of your bills or don’t include worming and other treatments. You may find when you add it up that it’s cheaper to just pay for the fees as and when your pet needs it. While we would always advocate for house contents and buildings insurance, you can find policies for everything now and not all of them are beneficial when you are trying to save.
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Entertainment
We all need a bit of enjoyment and often this is provided by our internet and tv packages! Unfortunately, these are pricey and some large companies hike their prices regularly, especially for their long term customers.
Consider moving to a cheaper phone and internet provider and then using Freeview and a low-cost subscription like Amazon Prime or Netflix for your movies.
Saving for the future
As you start to implement each of these steps above you will see very small savings. Tempting as it is to spend these, instead use an autosaving tool in your bank account which moves small amounts of money into a savings account each time it sees these little amounts leftover from a transaction.
They all add up and it can get a bit addictive seeing your pot of cash building.
Think about where you could be saving such as a takeaway coffee, the weekly takeaway you could cook at home. Fast fashion purchases you don’t really need and mending things instead of replacing them. After Covid if you worked from home, did you save money on commuting? If so could you request to do this more?
Once you see your savings account increasing you start to realise the sense of peace and freedom you gain from not having to constantly worry about money.
Improving your financial situation even in a crisis is possible. There are always opportunities and measures to be taken so you feel more in control. Use this time to think about where you really want to live your life and how your spending choices can support that vision.