COVID-19 has been tough for everyone around the world. Many lives have been sadly lost, businesses have been forced to close, millions of jobs have been lost, and that’s not to mention the amount of people that have suffered financially die to this awful virus. Now we enter 2021, the world has worked tirelessly together to find a light at the end of the tunnel. While we’re not yet in the clear, things are becoming much easier as we adapt to this new way of life.
Whether or not the pandemic has affected your finances, staying on top of them is always a good idea and today, we’re going to look at ways you can get out of debt and ways you can save money for the future.
Get out of debt
Getting into debt is so easy in this day and age, and the idea of pulling yourself out might be daunting, so we’ve got some great ways of doing that.
Eliminate unnecessary costs
Unnecessary costs are the items or services you pay for that aren’t detrimental to your life. Things like gym memberships and TV streaming services. Go through your ingoings and outgoings to see how much you have left over each month, and then go through your outgoings again to understand what goes out and when. If you find an expenditure that you no longer want, need or use, then eliminate it! You could save hundreds of dollars each year by simply eliminating a few small things from your monthly expenditure. You may find that you’re paying for services you’d completely forgotten about!
Cut your mortgage costs
Mortgages aren’t cheap by any meaning of the word, and if the pandemic has gotten on top of you financially, you may be struggling to keep up with your repayments. Many lenders have offered their customers a payment holiday during the course of the pandemic, so it’s worth checking with your lender to see if you can take a break for a month or two.
However, if your mortgage is extremely high, you might be looking at ways in which you can cut your mortgage costs permanently. Refinancing a home is another option you could look at. This is where you find a lender to pay off your mortgage, and then the debt you owe switches to your new lender. However, you will need to find a lender that can offer you lower repayments each month to free up more money. It’s worth noting that your payment plan may last much longer than anticipated, but it’s worth it to drop your overall costs each month and live comfortably.
Look after your credit score
Debt isn’t going to help your credit score, but looking at your credit score could help your debt! Services like Clearscore can help dive deep into your spending habits and help you climb out of debt while improving your credit score. It’s a completely free service, and it can help give you tips and tricks on how to get out of debt faster, all while slowly improving your credit rating. This means that once you’re out of debt, your credit score will be higher than ever and you can continue building your finances.
Save money for the future
The idea of saving money might feel non existent if you’re struggling to make ends meet as it is. However, saving money doesn’t have to be hundreds of dollars deposited at a time, and here are some great tips on how to save for the future, or even just for a rainy day!
Start a change jar
Change might not seem like much in your pocket, but if you’re regularly adding odd bits of change into a jar, it can mount up very quickly! For example, say you spend $9.25 in a store, putting the remaining $0.75 into a jar when you get home would allow you to save slowly but steadily. You may find that some days you’re putting just a few cents into your jar and other days you’re able to put more in! If you find the odd bit of change on the floor outside, pick it up and put it into your change jar!
What might not seem like much at the time will soon add up, and you could find yourself with hundreds of dollars worth of change ready to exchange at the bank to either deposit into an account, or treat yourself once in a while!
Open a savings account
Keeping money aside in your regular bank account is all well and good, but the interest rates are much lower than a savings account. Opening a savings account will give you the chance to earn a much higher interest rate on your savings. While you may not be able to afford to transfer lots of money into your savings account each month, just like the change jar you’ll soon begin to notice a healthy bank balance growing. If you receive money as a gift at Christmas or on Birthdays, you could deposit your money into the account to give it a nice boost every now and then! Saving money can be achieved by anyone, you just need the patience and tools to do so. Compare savings accounts online to find the best one for your needs.
Make it fun
Finally, saving money can feel really daunting if you don’t have much left over in the first place, so why not make a game out of it? Try out things like introducing a swear jar. Put money into the jar each time you accidentally swear, and create rates for each swear word. Not only will this help you save money, but it will help you refrain from cursing – especially in front of kids! Or, when grocery shopping, make it a contest with your partner to find the best deals on your shop. Put your money saved into a jar when you get home.
These tips will help grow your finances to help COVID-19 proof your finances in 2021! Which one is your favorite idea?