by Yusra » 25 May 2024, 17:37
The COVID-19 pandemic has reshaped how we live, work, and spend money. With businesses closed, events canceled, and travel ground to a halt, many households are seeing their regular spending patterns disrupted. While this economic upheaval has created challenges, it also presents opportunities to rethink budgeting priorities and boost savings. Here are some tips to maximize your savings during these unprecedented times.
Cut Non-Essential Expenses
With more daily activities centered around the home, you can likely reduce or eliminate certain expenses. Meals at restaurants, entertainment, clothing, and transportation costs have plummeted for those following stay-at-home orders. Analyze your past spending habits and make a list of non-essential expenses to cut back on or suspend. Even trimming $100-$200 per month can make a big difference.
Renegotiate Fixed Costs
Just because an expense is considered "fixed" doesn't mean it can't be reduced or eliminated. Look for opportunities to renegotiate things like cable/internet packages, gym memberships, subscription services, insurance policies, and more. Companies may be willing to offer discounts or holds to retain customers. Switching to lower-cost providers is another option.
Limit Discretionary Purchases
It's tempting to spend more on online shopping, food delivery, video streaming and other discretionary purchases when stuck at home. But these costs can add up quickly. Set a discretionary spending limit and look for cheaper alternatives or free online resources to avoid blowing your budget on non-essentials.
Refinance for Savings
With interest rates at historic lows, this could be an ideal time to refinance a mortgage, auto loan, student loans, or other debts. Refinancing to a lower interest rate can translate into substantial interest savings over the lifetime of a loan. Those savings can be applied to an emergency fund or other priorities.
Take Advantage of Suspended Payments
Many lenders, utilities, landlords, and service providers are allowing customers to defer or skip payments without penalties due to the pandemic. If you've been impacted financially, taking advantage of suspended payments can ease cash-flow constraints in the short term and preserve savings.
Boost Retirement Contributions
If you're still earning income, increasing contributions to tax-advantaged retirement accounts like 401(k)s or IRAs is a savvy savings strategy. Not only will you build a larger nest egg for the future, but you'll reduce your current taxable income. Those with extra cash on hand may want to consider maxing out these accounts.
Whether due to job loss, reduced income, market volatility, or simply spending less, most households will feel some financial impact from the pandemic. By making smart adjustments now, you can use this disruption to build healthier savings habits for the future.
The COVID-19 pandemic has reshaped how we live, work, and spend money. With businesses closed, events canceled, and travel ground to a halt, many households are seeing their regular spending patterns disrupted. While this economic upheaval has created challenges, it also presents opportunities to rethink budgeting priorities and boost savings. Here are some tips to maximize your savings during these unprecedented times.
[b][size=150]Cut Non-Essential Expenses[/size][/b]
With more daily activities centered around the home, you can likely reduce or eliminate certain expenses. Meals at restaurants, entertainment, clothing, and transportation costs have plummeted for those following stay-at-home orders. Analyze your past spending habits and make a list of non-essential expenses to cut back on or suspend. Even trimming $100-$200 per month can make a big difference.
[b][size=150]Renegotiate Fixed Costs[/size][/b]
Just because an expense is considered "fixed" doesn't mean it can't be reduced or eliminated. Look for opportunities to renegotiate things like cable/internet packages, gym memberships, subscription services, insurance policies, and more. Companies may be willing to offer discounts or holds to retain customers. Switching to lower-cost providers is another option.
[b][size=150]Limit Discretionary Purchases[/size][/b]
It's tempting to spend more on online shopping, food delivery, video streaming and other discretionary purchases when stuck at home. But these costs can add up quickly. Set a discretionary spending limit and look for cheaper alternatives or free online resources to avoid blowing your budget on non-essentials.
[b][size=150]Refinance for Savings[/size][/b]
With interest rates at historic lows, this could be an ideal time to refinance a mortgage, auto loan, student loans, or other debts. Refinancing to a lower interest rate can translate into substantial interest savings over the lifetime of a loan. Those savings can be applied to an emergency fund or other priorities.
[b][size=150]Take Advantage of Suspended Payments[/size][/b]
Many lenders, utilities, landlords, and service providers are allowing customers to defer or skip payments without penalties due to the pandemic. If you've been impacted financially, taking advantage of suspended payments can ease cash-flow constraints in the short term and preserve savings.
[b][size=150]Boost Retirement Contributions[/size][/b]
If you're still earning income, increasing contributions to tax-advantaged retirement accounts like 401(k)s or IRAs is a savvy savings strategy. Not only will you build a larger nest egg for the future, but you'll reduce your current taxable income. Those with extra cash on hand may want to consider maxing out these accounts.
Whether due to job loss, reduced income, market volatility, or simply spending less, most households will feel some financial impact from the pandemic. By making smart adjustments now, you can use this disruption to build healthier savings habits for the future.
