We all know that it’s vital to save money, but the reality is when it comes to practicing what we preach, most of us don't. It doesn't help that we are constantly bombarded with messages telling us to spend more and spend often. It's enough to make you want to give up trying to save altogether, which is exactly what you should not do. COVID-19 made many of us rethink how we spent money and realize the importance of having a nest egg for emergencies.
If you’re trying to grow your finances but aren’t sure where to start, try one of these four popular tips that showed us all how to be better with our money even in times of crisis.
1. Pay off your debt
The layoffs that happened during COVID and the subsequent Great Resignation have shown us how critical it is to keep our finances in order. By getting rid of your outstanding loan and credit card debt, you’ll be able to keep your options open no matter what happens. If you want to pay off debt but aren’t sure where to start, look into popular pay-off strategies such as the avalanche or snowball method. These strategies work with your natural motivations to get debt paid off quickly.
2. Re-evaluate your budget
Lockdowns and social distancing meant less money was spent at places like clubs and restaurants. Now that you’re moving into a post-COVID mindset, it’s time to rethink your spending habits. If you’re looking for more financial stability than you previously had, compare how you spent money in 2019 vs. 2020. You might notice some beneficial changes, such as cooking at home instead of eating out or using free exercise videos instead of an expensive gym membership, that you could continue into 2022 and beyond.
3. Automate your finances
Automatic bill pay had an upswing in usage during 2020 and is a fantastic tool for improving your finances. Losing money to late fees or stressing about payment deadlines can be a thing of the past if your payments are automated. Many banks and creditors offer this service for free, and you can start with one stable monthly bill such as a student loan or even utility and add more once you become comfortable with automation.
4. Put off making large purchases
Product shortages caused by the pandemic caused some to panic-buy essentials such as toilet paper, which put even more stress on the supply chain. However, despite the stress and frustration many felt at the grocery store, there was a hidden benefit for everyone’s finances. Impulse buying saw a massive decrease during the pandemic primarily due to supply chain issues. We were all forced to rethink how essential our purchases were and either wait for things to be in stock or move on completely.
Now that you have more choices available again, consider taking that “wait and see” mindset with you when that impulse to click the “checkout now” button comes back. By taking a step back to decide whether or not you need an item, you’ll be able to reduce your impulse shopping regrets and grow your bank account.
The bottom line
If you’ve realized the importance of saving money but aren’t sure how to start, try one of these four methods that helped many people turn their finances around during the pandemic. They’ll not only make a difference in your spending habits but in your bank account balances, too.