It’s safe to say 2020 was a pretty hard year for everyone financially.
Even if your wallet hasn’t taken a hit in the last few months it’s likely either your employer or someone in your family has found themselves stretched financially by the effects of COVID.
No point dwelling on the past, though. We may not be able to go back in time and stop COVID happening and ruining our 2020, but we can ensure we’re at least in a better position financially in 2021, avoiding bad credit scores and getting our savings back on track.
There’s no better time than now to start planning for post-COVID life, so here are our essential financial tips.
Tips for Getting Your Finances Back on Track
Draw Up a Budget That Fits Your Lifestyle
Throughout the pandemic, your monthly budget probably changed quite dramatically.
You probably saved on fuel, travel, and evenings out with so many offices and restaurants closed—but no doubt spent a whole lot more on your utility bills.
As the economy reopens and some sense of normality resumes, you need to restructure your budget to a post-COVID world.
Now, this doesn’t mean penny-pinching. COVID may have been kind to you, and reassessing your budget is simply a matter of moving funds that you would have spent on your home into your socializing budget. However, if you’re one of the many people no longer getting some kind of financial support on top of your diminished wage, you need to figure out how you’re going to pay rent, buy food, and cover all the other essentials.
The end of remote working, catching up on vacations, covering childcare—these are all real-world requirements your budget will need to be able to answer for.
Secure All the Incomings You Can
A huge part of getting your finances back on track properly is about making sure you’re making the most of every incoming payment available to you.
With so many people across the world struggling with a lack of work caused by the pandemic, it’s important to be aware of any possible financial aid available to you.
Most importantly, you should check if there are systems unique to your personal circumstances or line of work. There are businesses and charities with systems in place to provide or acquire support for everyone from professional actors unable to perform throughout the pandemic (such as Actors Fund) to retired veterans who have returned from tours with physical or invisible injuries and conditions (such as Vet Comp & Pen). Whatever line of work you are or were in, there will likely be some level of support available for you.
Likewise, you should start to consider how your talents could be put to good use to make that budget stretch a little further.
Side hustles such as running an Etsy store or becoming an online tutor become massively popular alternative revenue streams for out of work professionals during the height of lockdown. This is still a highly viable way of rebuilding your finances post-COVID. If you have a little bit of cash to invest, it can go a long way.
Have a Plan for Deferred Payments
Pandemic solutions have seen governments, banks, and landlords offering mortgage, loan, and rent deferrals to people who cannot pay them.
As things return to normal, people are going to need a plan to pay off these debts.
First, start by referring to the deferment terms so you know exactly what payment will be expected and if it can be broken up into installments. This will massively affect the overall structure of your budget.
These are perhaps the most important payments you’ll be making, as they concern your home, so make sure they’re priority number one post-COVID.
Start Saving Now
After all, any savings are good savings.
No one can be sure where we’ll be in six months or even a year. If we see another major spike across the world it could mean your finances take another hit and you need to dip into those rainy day funds to stay ahead.
Start working out a savings plan that works for you now. Don’t plan to give up everything you love for a year to get some extra cash, but, much like a budget, notice where you can cut back.
Online banks and apps like Monzo and Chime are a great way to save within even realizing it. These apps allow you to set a monthly budget on different types of purchases, sending you alerts when you’re about to break them. So much of budgeting is about self-control and being across your financial situation, so why not take responsibility out of your hands?
Tips for Businessowners
Before we go, here are a few tips for small businessowners who may be worried about how they can secure their enterprise’s financial security as well as their personal one.
- Find alternative revenue streams for your business. Is there a second service your business could offer to bring in some extra cash, such as gift wrapping for a small online store during the holiday period?
- Make sure you’re not overspending on digital tools. They may have stepped up and helped us host meetings, manage teams, and schedule inspirational social content remotely, but are you paying a subscription fee for an app that doesn’t actually boost your business all that much?
- Use freelancers rather than employing new staff. The freelance sector could really use a hand up right now, and freelancers present a cheaper, less permanent way for you to pick up lucrative contracts and projects without investing in hiring and training staff on permanent contracts.
It’s important to be realistic when financially planning for the end of COVID. We don’t know when that will be, and you can’t expect yourself to come out of this in better financial shape than you’ve ever been. That’s an unrealistic pressure.
Follow these tips and make sure you’re making the most of this period of reflection to ensure a healthy financial future for you and your loved ones.
Rodney Laws is an ecommerce consultant with EcommercePlatform.io. He has more than a decade of experience providing marketing advice to online entrepreneurs and businesses. He’s set up and marketed his own businesses and consulted on crafting campaigns for established companies.
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