People will always experience financial hardships. Unfortunately, the covid-19 pandemic has hit numerous industries, leading to people struggling to make ends meet. But all hope is not lost. If you are among the many facing financial struggles, you can be able to turn things around with these tips:
1. Deal with the Money Leaks
One of the first things when it comes to money management is having a solid budget. With a budget, you will be in a better position to spot and get rid of unnecessary expenses. If for instance you’ve noticed you eat out more than once per week and you can barely afford your daily expenses, then that is something to let go of immediately.
In addition, a solid budget will help you spot money leaks. This refers to those sneaky and unplanned expenses that have a habit of draining your account. Here are a few examples to help you:
(i) Subscriptions & Memberships
Remember when you signed up for Netflix, HBO Now, Disney Plus, and Amazon Prime, all with the aim to see an exclusive show but rarely use all these platforms? Or when you got into a gym membership and only attended twice but you are still being charged monthly? These are examples of sneaky life expenses that ought to eliminate.
(ii) Wasting Food
When facing financial hardships, the last thing you want is to waste food. So, freeze or get creative in order to save money.
(iii) Unnecessary Coverage
If you have an insurance subscription that you don’t really need for your phone, it’s time to let go.
(iv) AutoPay
With auto-pay, you get to avoid late fees and penalties for overdrafts, ATM charges, etc. Consider switching to a bank or credit union that provides these services for free.
(v) Buying Brand Names
You should always compare prices for a product before making the purchase. Also, avoid paying for brand-name products.
(vi) Random Expenses
While emergencies are unavoidable, having to pay the expenses is a form of money leak as it was unplanned. To avoid this, have an emergency fund that can last you for at least 3 months. Things like an unexpected flat tire should not force you to rely on credit.
If you have been contacted regarding attachment of earnings council tax find out all you need to know here.
2. Do Not Fret About Debt
This might sound counterintuitive, but in no way are we saying you avoid paying back your debt. However, when facing financial hardships, you may need to reassess your financial goals. For instance, you may have intentions to pay your credit card debt, but the situation only allows you to make the minimum payments.
Financial experts will always warn you about the risks of making minimum payments for credit cards, but when facing a money crisis, you really have no option and you do not have to fret about it.
By simply doing the minimum payment, you will be able to avoid the following:
- Late fees
- Possible serious credit damage due to late payments
- Credit card delinquency
- Penalty APR on your account
Another plus of making minimum payments to your creditors is that you get to free up additional money for your immediate requirements. When you are struggling to put food on the table or pay for utilities, there is no denying that every dollar counts.
While you need to be aware of the downsides, like a declining credit score and increasing interest charges, this is the only viable solution when in a financial crisis. Once you get back on your feet, you can resume paying off your debt.
In addition, look into relief options such as:
- Asking creditors to reduce or delay payments
- Negotiating for better fees or rates
- Creating a payment plan to handle your current balances
- Balance transfers or take a personal loan to consolidate.
3. Leverage Freebies & Discounts
When it comes to frugal living, this is one tip to keep in your mind always. Be on the hunt for discounts, freebies, and coupons. Examples include:
- Download a coupon application
- Buy from garage sales, thrift sales and websites like Facebook Marketplace, eBay and Craigslist.
- Stock non-perishable items when they are on sale.
- Use discounts when it is your birthday
Personally, I am a T-Mobile user and tend to leverage deals like free night disc rental at Redbox and even get a pizza & movie night for zilch. You can also save quite a few bucks by using a grocery store app.
4. Become a DIY Enthusiast
Another form of leading a frugal life is to make the products you would usually purchase like cleaning products. You may also want to learn how to:
- Fix a leaky faucet or pipe
- Trim your own hair
- Refurbish furniture
- Change oil in your vehicle
- Tailor or repair your clothing
Also, do not forget to turn to sources such as YouTube, family, and friends for advice. However, if you are not comfortable or don’t trust your skills in a certain project, get a professional.
Consider Reading : Understand How to Plan for Retirement?
