COVID-19 has impacted all of us in some way, and if you watch anything on the news you will hear about all the negative aspects, but have you ever wondered how this pandemic has positively affected us and what opportunities it has afforded us.
If you are in a lockdown state, you have seen a radical change in your routine – no more 9 to 5 office grind, no more commuting, which means no more café trips for coffee and buying lunches out, and no more petrol in the car. This is the perfect opportunity to assess your budget or, even, create your first one.
Right now, you finally have that one thing that has stopped you from getting on top of a budget… Time! If you don’t have to head into the office, you now have at least an hour, maybe two, you once used in commute time at your disposal. So, there is no excuse not to take a good long look at what exactly goes out of your bank account each week.
Before you can start a budget, you must know the path well-trodden and, in a world of tap and go, all the data you need is on your bank statement. So, now that you have all you need – time and data – there are no excuses today, my friend!
Here are some tips and a bit of a process you can use.
(1) Know you habits
Unless you know where your money has been going, you will never be able to plan to keep some in the future. Tracking your spending is essential to any budget. Use your bank statements from the last three months and note down all your monthly expenses. This could be done by simply listing your expenses under spending categories, e.g. food, entertainment, clothes, education, travel, etc. Now, what is your monthly spend on coffee?
(2) Plan ahead
Now that you know your monthly spends, you can set a budget. For example, you are most likely horrified at how much money you spend in your lunch break at work. Now is the time to create a budget for where you would rather spend that money. Make new columns for the things you would rather spend money on, e.g. a new TV, a holiday, dance lessons, etc. What are the things you want to be doing with your life that you never seem to have the time or the money for? This is your reset.
(3) Don’t just save it. Invest it!
Although saving is good, investing your money is better, because investing in things that can make us a passive income is just like buying more free time in the future. You should research all your options and types of investments, and which companies to invest in. An excellent way to start could be creating a self-managed super fund or even just adjusting your current managed super investment option. Don’t just leave your money sitting there, make it work for you.
(4) Ditch UberEATS and cook at home
Now, your assessment of your spending has told you if you are a once a month, treat yourself Uber-er or a ‘too lazy to cook’ kind of guy. I’m all for supporting local businesses, just be balanced. Look at your new budget categories and decide whether you would like to put $60 towards your new TV or chomping down that chicken parma.
(5) Ask yourself twice before spending
I always ask myself twice before spending. There are two questions to consider: Do you want it? Do you need it? There is a difference between wanting something and needing something. Then, if you feel like you really need something, is there a less expensive option? If you keep asking yourself those questions, you can achieve your goal of spending less and saving more.
(6) Stay at home
If possible, see if you can work from home, even after your lockdown has ended. This can benefit public health and also save you money on transport costs. If you do travel, why not travel locally? In this way, you can support small, local businesses and limit harm to the environment at the same time.
My final parting words of wisdom; only you can determine how the world affects you. The COVID-19 Pandemic can be the worst thing that has happened to you, or it can be a wonderful opportunity to have a forced reset.
Take care, stay safe and do something new for you.