The number of COVID-19 cases has soared exponentially in recent weeks.
And after months of staying at home and social distancing as a result of the pandemic, consumers have been forced to shop differently, too. Even eating out has been restricted due to the Movement Control Order (MCO) and many opted to order in instead.
Photo via LinkedIn
But are we actually saving money? Or are we spending more? Here are some tips on how you can save money during this MCO period, according to Bank of America:
#1 Record Your Expenses
The first step to saving money, is, of course, knowing how much money you’re actually spending.
Keep track of all your expenses, write it down in a book or using an app - which means every coffee, household items, and snacks, too.
Once you have all written down, make sure to organize them by categories, too, such as transportation, groceries, and mortgage, and then total each amount. Make sure to check all your credit card and bank statements to make sure you’re accurate!
#2 Find Ways To Cut Your Spending
If your expenses are high and you can’t save as much as you’d like, it might be time to cut back!
Identify the needs and the wants, and the nonessentials that you can spend less on, such as entertainment and dining out.
Cancel subscriptions and memberships you don’t use, especially if they renew automatically and try to commit to eating out only once a month and trying places that fall into the “cheap eats” category.
Give yourself a “cooling off period” when tempted by a nonessential purchase, wait a few days, and you may be glad you passed!
#3 Budget For Savings
Once you have an idea of what you would usually spend in a month, you can now get behind organising your recorded expenses into a workable budget. Sounds confusing? Hear us out…
Your budget should always outline how your expenses measure up to your income, so you can plan your spending and limit overspending. Be sure to factor in expenses that occur regularly but not every month, such as car maintenance.
#4 Decide On Your Priorities
After your expenses and income, your goals are likely to have the biggest impact on how you allocate your savings.
Although planning to spend your money travelling the world someday, be sure to remember long-term goals, and it’s important that planning for retirement doesn’t take a back seat to shorter-term needs.
#5 Set Saving Goals
One of the best ways to save your money is to set a goal. Start by thinking of what you might want to save for - maybe you’re getting married, planning a vacation, or saving for retirement. Figure out how much money you’ll need and how long it might take you to save it.
Here are some examples of short- and long-term goals:
Short-term goals (1-3 years)
Long-term (4+ years)
Down payment on a home
Your child’s education
Retirement
Always set a small and achievable short-term goal for something fun. Enjoying the fun reward you’ve saved for can give you a psychological boost that makes the payoff of saving more immediate and reinforced the habit.
Remember to review your budget and check your progress every month. Not only will this help you stick to your personal savings plan, but understanding how to save money may even inspire you to find more ways to save and hit your goals faster.
Hope this helps!
By: Aishah Akashah Ahadiat
