Money Habits to Keep in Mind After the Pandemic Era - Brink's Money
Money Habits to Keep in Mind After the Pandemic Era
15 Jul 2021
It’s safe to say that the COVID-19 pandemic has affected all of us in one way or another. If the past year has taught us anything helpful, it’s that we should be more mindful of our expenses and current financial situation. Whether you found that budgeting doesn’t have to be as complicated as it sounds or started teaching your kids how to save, this has been the right time to evaluate your financial habits. Even as the pandemic begins to die down, healthy money habits will always be an important part of life. As a result, it’s essential that you continue practicing the helpful money tips you have learned in the past year. Here we have highlighted a few of the most important:
Make the Most of Online Services
As more and more people get vaccinated and public spaces start opening to their maximum capacity, everyone will start going back to a more normal life and this means running errands like you used to. While there are things that you will be required to do in person, some online services that people used during the pandemic such as food delivery and video conferences, will remain popular. Perhaps one service that experienced an increase in popularity was that of digital banking. With online banking, consumers could reduce their exposure to COVID-19 and avoid the hassle of stepping foot into a bank. The good thing about most banks nowadays is that their websites and mobile apps now allow you to do most of your banking from your mobile device or computer. Now, you can save time and effort by taking advantage of these digital tools.
Prioritize Your Savings
It wouldn’t be a surprise if people say that they started saving more in the past year than they had ever before. No one could have seen the pandemic coming, which emphasizes the importance of having money set aside in case you might need it later. Regardless of setting aside money for a down payment or paying off a loan, saving is a good practice. It’s always a good rule of thumb to start off small, be patient, and work your way up.
Track Your Spending
If you ever seek out some financial advice, one of the first things they’ll tell you is to track your spending, which essentially means you’ll need to start budgeting. Budgeting may sound like a complex task but the truth is that it’s a major lifesaver and doesn’t take as much time and skill as you may initially think. The easiest way to create a budget is to follow these steps:
Calculate your income
List out your fixed monthly responsibilities and bills
Estimate how much you spend on variable expenses
Develop a budget with all your needs and expenses in mind
Additionally, it’s worth following the 50-30-20 rule.
50% of your budget is for essential expenses
30% goes towards your wants
20% you set aside for savings or debt payments
Clean Up Your Debt
Because of health and safety concerns due to the pandemic, we all changed how much we were going out and doing leisure activities including going out to eat with friends and family. As a result, you may have been eating more at home which in turn might have saved you some extra cash. Eating at home and finding more ways to save are helpful when it comes to cleaning up your debt. Whether you are still paying off student loans or your car, creating a plan for debt repayment that goes hand in hand with your savings plans will help ensure that you put yourself on a schedule and set aside money for what’s most important.
Seek Financial Advice
Although finances shouldn’t have to be a pain, there will be times where you might get stuck and be unsure about what to do next. When situations like this happen, it’s okay to seek the right financial advice. Financial advisers are there to help you with any area of your finances. If you need to work towards specific goals or want to map out your road to retirement, an expert will give you the guidance you need.
Celebrate Your Wins
In the past year, we haven’t had the chance to do some of the things that make us the happiest such as eating out, traveling, or getting together with friends. When you are working on your finances, you might think that restricting yourself from spending on things that might not be essential could be a hiccup for your plan. In reality, it’s important that you spend money on things that make you happy every now and then. Here is your chance to celebrate your wins. For example, when you finally pay off that loan you’ve been working hard on for the past couple of years, then treat yourself. Rewarding yourself will work as an incentive towards accomplishing your financial goals.
Having an Emergency Fund is a Must
What is more unexpected than a pandemic? That brings us to our next tip. One of the best things you can do to look out for yourself in case of an unforeseeable event is to have an emergency fund. Although it might not be doable to set aside 20% every month, even contributing $10 a month to an emergency fund can be helpful in the case that an emergency does happen.
Having Good Credit is a Necessity
If during the pandemic you noticed a drop in your spending, then there’s a chance you may have seen a boost in your credit score. The concept of credit utilization, or in other words the amount you currently owe divided by your credit limit, has a substantial impact on your credit score. If you weren’t spending as much in the past year, your credit score may have improved. Whether your credit score increased or didn’t, an important takeaway from this time is to take the time to work on your score which can later be a blessing when you’re applying for a loan with a low interest rate.
Throughout most of 2020 and into the first half of 2021, with a great percentage of people spending more time at home, we have had the time to reflect on the important things. Your finances and money habits are an important aspect of your everyday life and as life begins to go back to normal, it’s essential to keep in mind helpful money tips that we have learned over this period of time.
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