7 ways to secure your financial stability post-lockdown for a brighter future.
Once the dust settles on the pandemic, and we finally find ourselves living post-pandemic, we should be adopting new money habits to help us secure a healthy financial future.
This includes money we are already earning, money we can potentially start earning, and the most important of all, money that is owed in debts and needs settling – fast.
From job uncertainty to the fact that we finally realised how much money we used to spend commuting and socialising, all it took was a second lockdown in Sydney for many to finally realise, it’s time to get their money act sorted.
Here are seven easy ways to financial stability post-lockdown.
Cut Your Expenses:
Being financially independent is important, but it’s easier said than done. You want to cut costs, but at the same time you need to make sure your lifestyle doesn’t suffer too much.
This is where financial management comes in handy. It’s a way of making the most of your resources, as well as ensuring that you can still have fun and live comfortably in your day-to-day life.
A few simple hacks to help reduce spending can be; planning your meals ahead of time to avoid impulse buys, eating leftovers for lunch.
Eat at home more often to reduce the amount of money you spend eating out or on takeaway. Make a shopping list before hitting up the supermarket to make sure you’re not buying things you already have.
Pay off Your Credit Card Debt:
Adjust your budget to include a monthly amount above the minimum payments required to help ease your credit card debt.
Interest on credit card debt is punishing, but you have the power to pay off this debt and live easier — if you know how to do it. And with the extra funds, you’ll be able to pay down your credit cards faster.
Before the next payment hits your account, take-action with a few simple calculations using a financial calculator to help you work out how much you need to pay each month to get out of debt for good.
Save for the Future — Create an Emergency Fund or Start a Retirement Account:
Creating an emergency fund or starting a retirement account can be a daunting task. With seemingly endless expenses piling up month after month, like rent, cable, internet, food, and utilities. It can be difficult to see where you can fit savings into your budget. The key is to make saving as automatic as possible.
Start setting aside at least a small amount of money per week, like $10 or $20 and you’ll contribute to a great cause: your future self. If you’re not saving for the future right now, you’re missing one of the biggest opportunities to secure your financial stability.
Track Your Income and Outgoings to Get a Bird’s Eye View of Your Budget:
Your income, your expenses, your savings — every dollar detail matters. Knowing the details of your income and outgoings puts you in control of your finances, allowing you to make informed decisions about your money.
Your revenue may be coming from more than one source, but your expenses are probably coming from only one place: your bank account.
Create a list of your income sources, like what you make from work, investments, renting out rooms, etc., and then make a list of your outgoings such as rent or mortgage, insurances, loan repayments, etc. Then take note of your financial situation and determine whether you need to make money or save money.
If you’re spending more than you make, take a look at your spending habits and figure out where you spend the most and start cutting out the spending you don’t really need to make.
Have a Budget and Stick to It:
Create a budget for all your needs and wants. Create a list of everything you need and want to buy, and then prioritise them in order of importance.
Looking at trends and patterns over time. Creating an expense tracker is a great way to get in the habit of tracking expenses. It can also be a great way to visualise your finances and see where your money goes helping you budget better and control where your money is going.
Paying off Mortgages Early Is a Great Way to Build Wealth:
If you are paying off a mortgage, and your payments are sky high. It may time to seek additional advice from your bank and other banks who may have a better offer.
A lot of people don’t realise they can switch banks. Though many have contracts which lock you in with them, requiring you to make a pay-out amount to leave the contract. Often it can work out cheaper to pay the end of contract fee to switch to a bank who has a better offer, with some even offering no end of contract fees as well.
With the extra cash in your pocket, you’ll have more flexibility to make payments maybe buy a boat and have boat insurance, buy a holiday home, or set up an emergency fund. If you’re interested in paying off your mortgage early, it’s important to learn the basics of investing, saving, and budgeting, speak to a financial advisor. Your bank should be able to recommend one to you.
The sooner you pay off your mortgage, the less risk you take on in the future. It gets you closer to financial independence and the freedom that it brings.
Get a Side Hustle or Extra Work to Make Extra Money:
The new economy offers more opportunities than ever before. One great way to make extra money is by pursuing a side hustle or “gig” that you can work around your schedule.
This allows you to take advantage of your unique skills and hobbies, turning them into a business. Fiverr is one great example of a gig-based site that lets you share your knowledge with other people in exchange for money.
Or maybe you want to explore your crafty side and start selling those scarves you knit every winter for family and friends. There’s great potential in everything you do to turn into a business idea.