Hi Family!
How are you all doing? I hope you are staying inside (if you can) and safe during this COVID-19 pandemic. And if you are reading this in the future, how’s things on that end?
Now that we have been self isolating for quite some time, some of us are uncertain about our job security and many have actually already lost their job. These uncertain times are surely stressful and scary, but tightening up finances can make things a little less so.
I’m sure there are some areas where we know we can cut back on but some of us already have a pretty tight budget so squeezing out $500 in the next few weeks sounds daunting to say the least.
But I have compiled a few ways to cut back and buckle down as we ride this uncertain wave in a financially savvy way.
Please note that I am not a financial professional so all tips shared are just from a normal girl on the internet who likes to talk about personal finance. This is not professional advice.
I typically like to revamp my budget every 6 months or so and I ALWAYS find ways that I can save money. I am working on a post that breaks down how I do my budget, but in the meantime I will share a few tips here. The first task in saving $500 soon will be to take an HONEST look at your spending habits (dollar by dollar) and make a money plan going forward. Then I will share additional ways to save.
Step 1: Take an honest look at your spending (dollar by dollar)
This step is time consuming but very important. Before squeezing out extra money to save, first KNOW what your money is currently doing. You may think you have an idea, but trust me, you may be surprised at your spending habits.
First collect all of your statements for a month that is most typical of your spending habits. For example: if you know you just took an international trip last month, that month won’t reflect your usual spending habits. So choose wisely.
Once you pick that month, print (or collect electronically) all of your statements and log how much cash you took from the ATM. If you swipe multiple debit cards, bring them to the table. If you used your credit cards, bring those to the table as well. We need all of it.
Then label your paper with columns like Necessary Bills, Utility/ flexible Bills, Food, Groceries and Household items, Subscriptions, Shopping, Fun, and whatever else is relevant to your life. If you have kids, add them as an expense line as well.
Examples of categories and what they include:
- Necessary bills (rent/mortgage, car note, child support, tithe)
- Utility bills (heat & gas, cell phone, water, electricity, landscaping)
- Groceries & household (groceries for meals, cleaning goods, paper goods, pet supplies, medications)
- Children (school lunches, clothes and shoes, learning materials)
- Fun (eating out, drinks, nails, Target and home Goods runs)
- Personal care (nails, hair, waxes)
- Misc. (memberships)
- Savings (short term, long term, EMERGENCY, vacations, retirement)
Once you make all of your columns, go through EACH card statement and cash usage to fill in what items went into what category. So every time you come across a takeout order, file that dollar amount into “Fun”, if you got your nails done, file it into “Personal care” as well or whichever category you have that applies.
Once you get to the bottom, tally up that cost honies! At take a good, long look at those numbers. I also like to add them all up and subtract it from the amount you were paid this month. That will tell you how much of your monthly income you use each month. Sometimes it may be in the negative.
Okay now let’s look back at the numbers at the bottom of each category. Let’s say you spend $306.34 each month on food (non-groceries) like lunches and dinners with friends, set a new max amount for that category. My goal is to spend no more that $100 per month on non-necessary food spending, which are all outside of typical household groceries. Set a spending goal for each category!
Now take a look at your necessary bills and utilities. The necessary bills can’t be cut, so that number will always remain. But look at the utilities, see how much of that you ACTUALLY need, like your cable bill. In this season, you will be surprised what you can live without for a short while. For example: Do you have cable, netflix and hulu? Oh yea, then cut one or 2. It’s only for a short time and can be turned back on any time.
Then the next tip was monumental in my savings plans: Split up the accounts. Most banks offer free accounts (and if yours don’t, please switch) so I set up one for BILL, one for FUN, and one for OTHER. All of my bills, necessary and utility, come out of one account. I do not have a debit card for it either. So add up the cost of your bills and have that much auto deposit into the Bills account monthly. I make 1/2 of that amount auto deposit from my paycheck bi-weekly and have my bills auto paid from that account. That way it’s money I don’t see and don’t spend frivolously. I also always check it at the end of each pay period to make sure all is working well. Then the other account is set for PLAY, and I give myself a budget of play money. That included lunches, shopping, nails, etc. My limit is $300 bi-weekly. I then have a third card that catches all the rest and it is money to save, invest, get medications, etc. I will get more into that account in my budgeting post.
Step 2: Cut/ decrease some utilities
Now that you have combed through your utilities bills list (from the step above), and made some cuts/ adjustments, you have freed up some money to add towards your $500 savings goal. I know people that have saved $200+ per month by cutting or switching their cable.
Here are some examples of utilites you can cut or decrease to bring the amount down:
- Cable (or multiple streaming systems like netflix, hulu, Stars+, etc)
- Cell phone bill (maybe get a more limited plan to save money)
- Electricity (be more mindful of leaving lights on all day, electronics running, etc)
- Price shop for new car insurance quotes
Step 3: Mind those membership charges
Most of us are members to some form of service and don’t notice the total that is being auto-withdrawn from our accounts on a recurring basis. Now is a great time to see what you REALLY need and what can be picked back up later (or never).
I was so surprised last year when I added up my total membership expenses! Between the gym, photo editing software, business learning program, Audible, etc, I was giving away almost $100 per month. Think about the ones you don’t ALWAY use and which are not making you money, and ditch them for now.
Actually, today before I wrote this, I was able to get my adobe Lightroom membership payment suspended for 2 months while still maintaining the perks of the membership. They stepped up to offer free services to already existing customers to help with cost during the COVID-19 crisis. So if you use Adobe products and pay monthly, go to their site, speak to someone in the live text chat, and see if you too can save until end of June. Also search around for other companies offering financial assistance at this time. Then use that money you would have otherwise paid towards the $500 savings goal. Tip: If you fail to re-allocate that money you just saved, it can easily get eaten up in normal spending. So move that money to savings automatically.
Some other memberships to cut for the time being are:
- gym memberships
- shopping memberships like Costco, BJs, Amazon Prime, etc
- Audible (and other book membership apps)
- Music streaming services (apple music, tidal, etc)
- Membership boxes like Ipsy, Birtchbox, etc
I know the music one may be hard, but we have free radio apps and pandora. You will survive.
Imagine cutting just 3 memberships and saving an additional $60 per month. That will add up with the other areas you cut and get you to your goal sooner.
Step 4: Cut the Luxuries
We are fortunate to live in a time where we can get luxuries readily and when you have an abundance of disposable money that is great! But if you are trying to save money, you need to decrease or elimiate these. Again, it may just be temporary but financial security is more important that feel-good/ look-good luxuries. I know some are great for self-care, but it is also important to notice what you classify as “self-care” to justify an unnecessary expense. And how many of these you allow in the season of saving.
Personally, I don’t have a problem letting go of these luxuries when I am trying to reach a savings goal. That satisfaction of reaching my desired amount feels so much better than most instant gratifications. So indulge responsibly, and infrequently.
Some examples of luxuries are:
- Grocery delivery services at a charge (those fees can be another item or money in your account)
- Clothing shopping– wear what you have and re-purpose old pieces. There will ALWAYS be something nice in the stores to buy at a later date, I promise
- Rental services like Rent the Runway– When you are strapped for cash, do not pay for clothes that you then have to give back. Pay yourself and shop your closet
- Uber– Unless it’s your only mode of transportation, cut it. It can really add up, quickly. Take public transportation, car pool, walk, and drive.
- Constant Hair and Nail expenses– cut down or eliminate temporarily
These may seem like lifestyle changes that are impossible or “necessary for self care” but the best thing you can do for yourself is be financially safe. Make sure you have an emergency savings before you spend on things that are fleeting.
I know hair and nails are BIG and trust me, I love to get them done too. I know we all want to look good but don’t be the girl asking to borrow money for bills with $80 nails and $300 weave. Go to the salon less frequently and try to do some yourself (or go without for a short while). Your future self will thank you and be fly when doing so. Again, TEMPORARY cut backs for a long term financial goal.
Step 5: Call around about COVID-19 financial relief
During this time, there are several companies that are doing their part to help those who have lost their job, may lose their job or need to be mindful with their money. In one of the sections above, I mentioned how I spoke with an Adobe rep online to get my subscription payments suspended for 2 months as I continue to use the platform. Call around to people you pay and see if their company has that as well.
Are you repaying federal student loans? They are stepping up to help those who cannot pay right now by suspending principal and interest payments through September 30, 2020. It is not cancelled, you do still have to pay your full amount back, but I believe it will be penalty free for a few months. I don’t have all the details so call your student loan provider, search the internet, and save where you can if you must. The use that money you would normally pay towards to loans to automatically go into your savings account. That can save some people a few hundred dollar per month, depending on the amount of your payments.
Step 6: Gigs and Side Hustles
If your main job or source of income is not allowing you to save at the rate you need, consider supplementary income. It does not have to be as official as a second part-time job, it can be gigs you do online when you have the time. Do you have a talent in writing, web design, graphic design, organization, transcribing, tech support, teaching, and so on? Well there are sites that lists gigs for one-off jobs that bring in relatively quick money.
Some popular gig sites are:
- Fiverr (global network of freelancers)
- Flexjobs.com (freelance, part-time employee and telecommuting jobs)
- Gigster (IT related gig work)
- Upwork.com (project jobs– single and on-going)
- Indeed (job search engine– temporary, part-time and full-time)
There are also some gigs and side hustles that can be done offline, once we are no longer dealing with this COVID-19 pandemic. There are cleaning and organizing services, in person tutoring, photography, and so much more. Google is our friend! Search what others are doing because there is ALWAYS money to be made. You just have to work to find it.
Step 7: Seek professional guidance
As I share these tips, I am just a gal on the internet who loves to talk about personal finance. I am not a financial advisor or any other financial professional so all of this are just my opinions and thoughts. When you have questions and advise on what to do with your money, find a professional to speak with.
If hiring someone is not in your budget at the moment, there are a TON of free resources online and many financial experts share their gems for free on their social media platforms and websites. So I suggest checking those out and following them online. Many have been gathering their audience’s questions during this unprecedented time and answering them on free lives, webinars and email lists. Go and grab up all the free resources that are at your finger tips, I sure have been daily!
I hope this list I put together was helpful! Let me know which of these you will get started on right away, though I suggest you doing them ALL. And if you have any additional tips to share, I would love to read them. Add them to the comment section so we can share the knowledge wealth.
Until next time my loves!
With love,
CoCo
** Don’t forget to save this to Pinterest to reference later & share with others**
