One of the few statistical comforts of the otherwise nightmarish Covid-19 pandemic — that it largely spares young people — is fading. On the contrary, the long-lasting effects are striking many individuals harder, especially in their financial life. Have you found yourself in a spot where it seems you have too many debts and too many payments to make every month, making it hard to achieve your financial goals? Is it becoming frustrating?
Don’t freak out; we are here to offer some practical tips to improve your financial situation, even during this long-lasting pandemic!.
1. Understand Your Financial Situation
Having a comprehensive evaluation of your financial condition is the very first step in improving your finances. How are you doing financially? How much debt are you in? What is your retirement plan? To turn your finances around, you need to know where you stand currently in order to improve things accordingly.
2. Create a Budget that Works
Once you have a clear idea of your financial condition, it is time to create a monthly or annual budget that works best for you. Track your income and spending with as much care and detail as possible, and figure out the gap between your monthly payment and spending. Do you have money left to put towards savings or to pay off debt?
You should create a budget that takes into account how much money you will spend, what you will spend it on, and how you will pay your credit cards or debts. With a clear tracing of your spending habits and your income, you may need to cut out some of your discretionary spending so that you will have more savings in your bank account. Remember to plan for expected spending, savings for the future, educational fees for the kids, and more.
3. Spend as Little as Possible
If you want to improve your overall financial situation while also having no other options to make more money in a short period of time, you should trim your expenses. Determine that you are paying for and if it caters to your desires versus your needs. Do you need that beautiful dress that looks similar to your other ones? Do you need to spend money on takeout rather than cooking at home? There are several ways you can cut down on spending if you are honest with yourself and take into account what is truly essential when it comes to monthly costs.
4. Maximize Your Savings
This is related to what we just talked about in tip No.3. If you have a steady income every month, spending less is often another way of saying “maximizing your savings”. In addition, it is always better to keep your money in a savings account, which will offer you an interest rate that exceeds the prevailing inflation rate and results in a positive return on your money.
5. Invest for your Future
Even if you only have small sums of money to invest, go for it. Make use of tax-free or tax-deferred accounts like a TFSA and RRSP to give your investments a boost. Make sure to maximize the opportunity. You may also consider those low-risk financing products offered by trusted and reliable institutions. Not doing so means you are leaving money on the table! Don’t let your money sleep in your account!
6. Fix Your Bad Credit
We are currently being challenged with widespread, long-term unemployment, financial difficulties, mental stress, and a global public health threat. To keep the negative effects of our current circumstances to a minimum, we have to keep an eye on our credit score and regularly monitor it. Bad credits might bring you many inconveniences in life that are incredibly frustrating: getting refused for loan applications, can’t get a mortgage or lease a car, etc. Thus if you want to improve your financial life, fixing your credit is a great path to take! You can refer to our previous blog posts to get an idea of increasing a poor credit score.
7. Take Advantage of Free Money When it’s Available
Earn cash back, use coupons and go shopping when discounts are offered. From the outside, this may look like a symptom of a poor financial situation, however, it is actually free money! Let’s do the math: if you can save 5 dollars per grocery order, how much money do you save after 100 trips? $500… not too shabby. That is enough for several months worth of electricity bills!
8. Increase your Income
One tried-and-true way to improve your financial life is to have a side hustle. Even before the pandemic, the Bank of Canada found that about 30 percent of Canadians were doing some form of gig work. Your side gig can offer you an excellent opportunity to make more money, thus improving your financing life, especially during this challenging time.
Try to find a gig that aligns with your interests and can keep you sufficiently motivated. You will have fun while having extra work hours. The possibilities are endless!
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