The COVID-19 situation has affected us all, and lost or reduced income is one of the most prevalent—and difficult. As governments decided to shut down economic activity for prolonged periods, lockdown meant more ways to save money for many of us, too.
Whether it was cutting down on the costs of commuting while we worked from home, or just because we were less likely to eat out. But as many of us return to the office, saving money isn’t a habit we should give up.
After all, the pandemic is still going strong—even as the nation continues to reopen. Here’s how you can keep saving money as you emerge from the quarantine!
1. Cut the cord
In the last five years, we have seen a precipitous decline in cable TV subscriptions. Effectively, ever since broadband internet became more widely available, people have discovered that cable TV bundles don’t represent as much value as they once did. Instead, video streaming services such as Amazon Prime, Disney+, YouTube Premium, and Netflix are taking over.
With these streaming platforms, you can enjoy a considerable amount of entertainment for a fraction of the monthly cable cost. For example, a mid-tier TV cable plan comes in at $75 on average, while Netflix’s mid-tier monthly subscription is only $13.99. That is nearly 6x less of a monthly expenditure! Annually, just by cutting the cord, you could cut your expenses to $156 from $900. Most Americans spend ~$100 per month on cable TV—so savings could be even greater.
2. Cancel automatic subscriptions and memberships
With the advent of SaaS (software as a service), we have seen an explosion of software suites that require monthly subscriptions for a variety of services. From email clients, social media auto-managers, cloud storage, to specific software packages like Adobe or Microsoft Office. Thoroughly review your subscriptions and memberships and cull them down until only what is necessary remains. You will inevitably find out that many of your subscriptions offer marginal convenience, for which you can find a free solution, or simply go without instead.
3. Check your insurance rates
Take advantage of free online comparison calculators to figure out if you are overpaying for your home or auto insurance. As the World Bank forecasts that the global economy will shrink by 5.2% this year, you can rest assured that insurance providers will offer competitive rates to encourage people to hold onto their policies.
4. Use credit cards wisely
A credit card is a fantastic financial instrument for your personal finances. Like any instrument, though, your credit card can be harmful if it isn’t used wisely. Some are able to use a credit card to build their credit history and earn rewards. But for others, using a credit card wisely means not using one at all.
No matter what your available credit limit, try to keep your usage of it to under 30%. This can be more difficult the lower the limit you have, which is why it’s important to pay off your balance more frequently in this case. So in the case of a $200 secured credit card limit, you should ideally keep your balance to $60 or less at a time.
5. Negotiate rates with your credit card company or complete a balance transfer
If you happen to have a low credit score as a consequence of untimely debt payments, you could opt for a secured credit card. Make sure to shop around for bank offers first and compare the rates. After several months of responsible use, you should start to see your credit score improve. And after a year of on-time payments, many secured card users are able to qualify for a standard, unsecured card. They can then close their secured account and receive a refund of their deposit.
6. Avoid convenience foods and fast food
Did you know that grocery stores and supermarkets are designed to provide maximum psychological impact to entice you to buy more? From the merchandising of items and shelves, smells, and music to price tag graphics, they are all colluding to make you spend more than you planned. Think about it, how many times have you gone into a store with a specific shopping list, only to end up spending significantly more?
David Bach coined and trademarked the phrase “Latte Factor”—those small, day-to-day conveniences that, when eliminated, can actually provide you with a significant, and somewhat surprising, sum of money. For example, takeout costs way more than adequately prepared, nutritious meals. It only takes 60 minutes of weekly food prep to supply you with affordable meals and snacking options for the next 7 days. On average, you’re paying anywhere between $10 to $20 for a takeout meal whereas a home cooked meal costs ~$4.50 per serving. And don’t be afraid to use a crockpot to make hearty meals that save both time and money!
7. Plan out your meals for the week
Meal planning helps you to save money because you’ll know in advance what’s on the menu. You’ll be able to plan meals around items that you already have at home, which means you won’t overspend on groceries, some of which will end up spoiling—the result of not compiling a grocery list and buying too much. With meal planning, you’ll buy just what you need.
8. Save money automatically
Set up automated transfers between your chequing and savings accounts—a feature that’s available at almost every bank. You determine the time, amount, and where the money is to be transferred, deposited, or split. Instead of having to manually take out a portion of your paycheck every two weeks, it’s taken care of automagically whenever you’re paid.
Down the line, you can then use these savings for investments that would yield you higher interest rates. For instance, long-term Bitcoin investors are again poised to reap the benefits of holding Bitcoin as it soars toward the $20k price, despite its weekly fluctuations.
9. Park your savings in the right place
Governments offer many opportunities for people to save thousands of dollars more effectively. The 401(k) plan is one of them. If your employer offers you such a plan, and you are not using it, it’s safe to say that you are already losing money by not taking advantage of it.
However, given that 401(k) is a retirement account, make sure to be as debt-free as possible before a percentage of your pre-taxed salary goes into the account. Only then would it be financially safe to divert your paychecks into either an emergency fund or save for retirement.
10. Withstand the urge to buy
Nowadays, we are completely submerged in online ads and online shopping. Machine learning algorithms know our habits and behaviors by heart, always enticing us to spend and order something within a span of a few clicks/taps. To avoid this trap of instant gratification, make and uphold a hard rule for yourself — postpone buying something for at least 48 hours. Then, see if the urge passed. If it didn’t, it means the thing you want is essential, or you perceive it to be so. Take care to check that perception as well.
We can divide money-saving efforts into two categories: minimal and maximal. The minimal measures are immediately beneficial and easy to implement, such as cable cord-cutting or tweaking food habits. Maximal efforts in money-saving revolve around seeking better deals with your banks and insurance companies, to name a few.
The tips and tricks above work, but only if you do. Those who start today—right now—are the ones who will see the biggest and fastest return on their efforts. You can do it! Believe in yourself! Make a plan for saving and trust that you’ll have the intestinal fortitude to stick with it!