The worldwide COVID-19 pandemic has affected both businesses and individuals. As a result, some economies have taken a hard hit. At this point, you might be under the impression that there is nothing you can do to improve your personal finances. The truth could not be more opposite, though.
When it comes to personal finances, there are always options. However, since you’ve never really personally considered improving them, you probably don’t know where to start. We are here to discuss this in greater detail. Here are five ways to improve your personal finances hassle-free.
Be mindful of your debt
During the pandemic, many banks and landers came up with great COVID-relief packages to cushion the blow of the pandemic for their clients. If you have a debt, you should check if your lender has some new program in its offer. For instance, you may be allowed to skip a payment or two or pay the minimum amount for some time.
If there is no such program, you should contact your lender directly. Then, you can file for a payment deferral or temporary forbearance. If you opt for this course of action, you should pay attention to the interest rates as they continue to accrue.
Some people are forced to take another loan or mortgage. That is an option as well but you should always read the fine print on the agreement. If you own a home, you can benefit from a reverse mortgage and borrow against the value of your home. You can receive funds in several ways:
- The entire sum
- Fixed monthly payment
- Line of credit
Some platforms can help you verify your eligibility for a reverse mortgage, APR, and real-time interest rates. Feel free to check this calculator to get a better insight.
Start saving small amounts
Many people disregard saving small dollar amounts as a viable savings strategy. However, saving a couple of bucks here and there can amount to a significant sum by the end of the year. If anything, the pandemic has made it possible to start saving small amounts.
People are forced to spend more time at their homes, and many companies promote remote work. Look at it as an excellent opportunity to put the cash you would’ve otherwise spent on dining outside, entertainment, gas, and public transportation aside. You will be amazed by the amount you’ve saved.
Don’t spend these savings on something that you don’t need. Instead, use all this excess cash to set an emergency fund. Then, when things are over, you will have some money that you can use to improve your credit score or simply surprise your family with a trip.
Prioritize your spending
Pandemic is a great time to prioritize your spending and revisit your home budget. The best way to improve your personal finances would be to start tracking your expenses. Make a spreadsheet with two columns – necessities and non-necessities. After a month of tracking, you will be able to see how much cash you spend on things that are not essential.
What should be considered a necessity? Grocery, electricity, rent, medications, and water bills are all necessities. However, your Netflix subscription, fast food, and a new video game are not. If you stop spending cash on items in the non-necessities column, you will get a better financial standing.
Pay bills on time
Paying bills is paramount for better personal finances. Why? Because if you don’t, you will have to pay more with interest rates accruing and a late payment fee. The best thing to manage this is to use automatic payment options.
This is an excellent opportunity for you to assess the necessity of all the services you are paying for on a subscription basis. Cutting down on expenses in this area and preventing late payment fees from incurring will help your budget a lot.
Make smart investment decisions
Pandemic is not a good time to pull out from your investments. History teaches us that the stock market always recuperates after some time. So don’t sell your assets. Instead, sit on them and wait for the storm to pass.
If you have some extra cash, consider investing it. There are plenty of smart investment options. For instance, you can move your cash to your retirement savings. Or, you can open an investment account and look for viable investment opportunities on the stock market.
Yes, the pandemic made personal financial planning considerably more complex. It can be hard at first, especially for those not experienced with managing personal finances. The crucial things to do is to include intelligent debt management, paying bills on time, mindful spending, and kickstarting savings funds. If you manage to do all of this, you will improve your finances and come on top of the pandemic.