Let’s be honest, some of you who just started saving as a 2020 New Year’s resolution might have pushed the idea to the back burner for now. And some might even have already dabbled into your savings during the pandemic with the reduced work hours, salary cuts, and delivery fees from online groceries and other essential needs. If you’re using your emergency fund, that’s OK, don’t feel guilty about it. But now it’s time to replenish it.
So how can you save money during a global pandemic? Ramit Sethi, CEO of personal finance website I Will Teach You to Be Rich, shares what he calls the “CEO strategy”. During the pandemic, he recommends people find new ways to cut down on their top 3 highest expenses which they have the ability to cut back on – rent, eating out, and discretionary spending on material items.
Rent
If you’re renting a place near work, consider moving to a cheaper one you can afford with your “new normal” budget. Or if possible, look for a roommate to split costs with.
Eating Out
One good outcome of the lockdown is that most of us learned how to prep our own meals and cook our own food. We got to see how cheap preparing our own meals is compared to ordering from expensive fast foods and restaurants. Add to that, the tips and delivery fees that, when piled up, is also a huge expense.
Spending on items you do not need
Now is as good a time to cut back on online shopping. Think twice before clicking that “Buy Now” button. Ask yourself if this is something essential to your living situation now or if this purchase can wait.
Another easy way to get more money back in your wallet is to cancel monthly subscriptions, such as streaming services, meal subscriptions, gym memberships, postpaid plans, cable, etc.
Review any recurring charges you have on your credit or debit card. It could be YouTube Premium, Spotify, Amazon Prime, Netflix. Is there anything you’re not using as often these days? Do you really need cable when you have Netflix? Can you workout from home instead of risking it at the gym?
Eliminating these expenses doesn’t have to be permanent, but it could free up some much-needed cash in the meantime.
A portion of the extra cash you get from cutting back on costs can be allocated to a savings account. You can also automate deduction from your payroll so you’re covered in case you forget to manually deposit it. Just make sure the amount you save each month is an amount you can comfortably forget about.