You need to have smart money habits now more than ever as the health crisis drives the economy into a challenging phase. As companies and businesses are forced to close their doors, millions of Americans are filing for unemployment. Even as the country is slowly trying to open up again with strict guidelines to try and prevent an outbreak.
Regardless if you still have regular work at this point, the future is still uncertain. It was already a challenging task before the pandemic. But now that the health crisis has a strong grip on our nation’s economy, preparing for tomorrow just became a little more difficult. You need to be more resourceful and strategize well to keep your finances intact.
This is one of the reasons why you need smart money habits during this time. But you need to understand that habits develop over time. You can definitely decide on starting a positive financial change but for them to form as a habit, that will take time. Habits are actions you do on a regular basis without thinking much about it.
You might have a habit of saving money from your income on a regular basis because your parents taught you to save money when you were still small. If you also have a habit of opening your monthly statements regardless of your financial situation, this is also part of your habit that you have formed over the years. With the health crisis, it is a good idea to start working on money habits to take control of your finances.
Create a household budget
Forbes shares that even as Americans struggle with their finances, over 90% want to develop better money habits. This is important because some people live from one paycheck to another. With the health crisis on-going, it will be a lot of help if you have an innate desire to improve and take control of your finances.
One thing you need to do if you are just about to start making a budget is to start with a simple one. If you begin to think that the more complicated types can help you the most, you are mistaken. The simpler your budget is, the easier it will be to follow it. Remember that it is one thing to create a budget and a totally different discipline in following it.
Smart money habits start with a simple and easy to follow household budget. List down all your expenses as well as your sources of income. Remember that there could be significant changes to these because of the health crisis. Your income could have dipped in the last few months and your expenses could have shifted as well. At the end of the day, your goal is that your income should be able to cover for all your expenses. If not, then it is time to make some changes to help you reach that goal.
Be proactive in expense tracking
One of the smart money habits you need to get a grip on is being proactive in tracking your expenses. It is one thing to list down your expenses on your budget but being proactive in managing it is another. When you put your budget together, you simply jot down what you have spent for a certain period of time. But being proactive means having an active role in determining how much those expenses are.
To help you become proactive with your expenses, you need baseline numbers. This simply means that you have to monitor your expenses for a certain period of time. Once you have that, you then find ways to manage the amount you spend every month. This means being creative with your expenses and finding ways to lower them down.
If your food expenses are too high, consider buying ingredients in bulk and cooking your own meals at home. You can even prepare them in advance so you have ready meals for days at a time. You can also make do with one car for the meantime especially when you are working from home. You can even take a bike to and from work and get a great exercise out of it.
Smart money habits mean planning your meals carefully
Food is one of the areas in your finances you need to focus on. This is because the US Department of Agriculture shares that as much as 40% of the food supply in the country goes to waste. You might think that the food you throw down the garbage at home does not matter much. But it actually contributes to a bigger problem.
Meal planning and preparation is a lot of work. Yes, you can save money when you buy in bulk but before you do, you need a meal plan. Otherwise, a lot of what you buy will only end up in the trash. It will help if you list down what you are going to eat for the next couple of days. You then buy around that meal plan.
Doing this will help you lower the food waste in your home. Every item you buy has a purpose on what meal it will be and even on what day it will be served. There will be common ingredients you have an extra of around the house. Just make sure that you keep a list handy when you go out and buy groceries. This will help prevent you from overstocking on items around the house.
Refrain from impulsive buys
One of the smart money habits you need to develop early on is identifying and staying away from impulsive purchases. PR Newswire shares that Americans are spending over $180 on impulse buys during the pandemic every month. If you can get a hold of this, it can help you save some money which you can put to better use.
One way to do this is to never put your credit card details on shopping sites. The easier it is to check-out and pay for online purchases, the more you could buy things you do not really need. If you cannot control online shopping, use a prepaid card. This way, you are forced to budget the money you have when making an online purchase.
Consolidate your debt
It is tough to create smart money habits when you are constantly running behind on your payments. You might also have a hard time juggling multiple payments all at the same time. To help you manage your payments better, you can choose to consolidate your debt. Doing so makes it easier for you to meet your payments and you get to form that habit a little more consistently.
On top of this, debt consolidation can also help you make lower payments than before. This can be a big relief especially with the health crisis negatively impacting your finances. One idea is to use a 0% card to consolidate other credit card debt. You can also choose to spread your payment over a longer period of time. Though you will end up paying more in the end, you get to free up some much-needed funds at present.
It will be a big help if you begin to develop smart money habits now to help you manage your finances better. These positive money habits will also give you the chance in reaching your financial targets faster.