The Covid-19 pandemic has hit the economy worldwide. Due to this bad economic condition, the concept of saving money has now become uncertain for many people; many are sitting at home idle and jobless. A lot of people have been left with no income or less income. In this tight economy, it may seem harder for you to save money. However, if you prioritize these frugal living tips, saving money will not be as hard as it seems.
When the economy is tight, the most obvious thing that you need to do is tighten your wallet. Here are 14 frugal living tips that can help you save more and avoid debt in this tight economy:
1. Prioritize your needs. Recognize and determine your needs. This is going to help you lower your expenditure as much as possible. Because, if you recognize your needs, you will know what to spend your money on. So, you will be able to avoid wasting your money in the process.
2. Make a list of your monthly expenses. Based on your monthly income, there must be some fixed monthly expenses. You also need to make a list of the expenditures to match your income. Usually, there are some unnecessary and necessary expenses in every household. You must try to reduce the stuff that you purchase unnecessarily as frugal living is the ideal secret behind a financially safe life.
3. Get help with budgeting software. Once you recognize your needs, you should follow a budget to meet necessities without any money crunch. You can use money-saving and personal finance budgeting software that simplifies this budgeting process.
4. Add envelope savings to your budgeting. Try envelope savings along with your budgeting. This is going to help you save for a rainy day. If you put away the envelopes at a safe place, you won’t even remember during your impulse buys that you have money. This can help you save money and lower expenditures too. If you can lower expenditures, you will also be able to easily manage your debts.
5. Maintain utility bill payments. Try to maintain utility bill payments. Although utility bills do not get listed on your credit reports, if you fail to make payments on these, these can go over to collections. These situations can result in an increased debt amount.
6. Avoid buying branded items. Rather than buying branded food and clothing, get generic or store brands. This can help you save a lot of money on your shopping. In the case of foods, you will be able to see that the ingredients used are almost the same as those of the other well-known brands. The packaging and the processing are the same as well. So, why should you pay an extra dime in this tight economy if you can do with a generic brand?
7. Use coupons to lower expenditures. Use discounts and coupons to lower your expenditures as much as possible. Coupons help you to buy some items at lower costs. You can get really good deals if you collect coupons. However, to save money through couponing, you will have to remain organized. Sometimes, you may not even need a coupon that you have collected. In this case, you can exchange it with your friends and relatives for a coupon that you do need.
8. Set immediate financial goals. With your budget, you must also try to set financial goals. Until you have specific financial goals you will probably spend more money on frivolous purchases. Set goals that are important to you, try your best to live within your means, and reach your goals within the specified time.
9. Don’t take any financial risks. When the economic situation is tight, try to avoid any form of financial risk. This can otherwise lead to increased debt, thereby hurting your credit. The greater the debt, the lower your credit score will be. This means that you will not be able to get any form of new credit.
10. Double check before investing. If you are planning to invest your money for greater returns, always remember to double-check the investment option. Otherwise, you may not be able to get greater returns out of your investments. For example, currency investment now is considered to be risky while gold is always considered to be a secure investment option.
11. Lower the usage of credit cards. The best way to optimize your expenditures is by lowering the usage of credit cards as much as possible. This can help you in lowering the way you expend your money and can help you incur fewer debts. Thus, you will easily be able to save more than you could usually do beforehand.
12. Focus on the importance of financial freedom. You should try to focus on financial freedom rather than your debts in general. You should try your best to better your financial position and this can in the long run help you to bring down your debt levels.
13. Decide on a debt payoff method. You will have to decide on the debt pay off method that works best for you. Rather than going for different debt-relief options, first, try out the debt pay-off options. For example, you can try the debt snowball or debt avalanche method. One of these methods may drastically help you ease out of debt.
14. Repay your current debts. You should be worried about your existing credit card debts as it can create difficulties to save money daily. Check out different debt relief options to repay debts. Once you are debt-free, you can save money or start saving more once the pandemic is over.
Because of the pandemic, people need to be more cautious regarding their finances. Saving money in this tight economy can be a stressful endeavor or an act of great achievement. Start with these 14 tips to help you achieve success.
Before purchasing something, ask yourself two questions, “Should I use my credit card or should I use cash?” and “Do I really need it or do I just want it?” Only spend money on the things that you need and not what you want. By doing so, you can save extra money during this bad economic situation.