We all know that life during COVID 19 is filled with countless unavoidable worries of the financial kind. Some may feel it more than others, but we all feel it non-the-less. We are losing our jobs, taking salary cuts and closing our once thriving business. Basically, we go into level 1 of survival mode when it comes to our finances due to the crunch we feel. Here are 5 Tips to get you to the next level of survival mode.
Know Your Credit Rating
Your credit rating is like a meal ticket. If it’s good it will get you the best 3-course meal money can buy but if it’s bad, you can only get a single meal a day that is less than satisfactory. Your credit rating is information that lenders use when deciding if they want you as a customer. The higher your rating, the better your chances are at getting the financial assistance you need for all the important things in life. If you do not know what your credit rating is, there is no time like right now to get the information. By seeing your rating, you can see where you stand and recover if your rating is below par.
Find out what your credit rating is for free here: https://www.clearscore.co.za.
Get Your Debt Under Control
When you are in a hole you need to stop digging. The same applies to your debt. Stop unnecessary spending. I did an interesting exercise recently and took 3 months’ worth of bank statements and highlighted my spending pattern. On average I was spending between R 4,000 - R 6,000 a month on frivolous spending with nothing to show for it. Eating out, buying snacks from the petrol station, impulse purchases and retail outlets, overspending on my food budget etc. Take a highlighter and look at your spending. See how you can cut back on those unnecessary card swipes every time you go somewhere.
Get On Switching
‘Switching’ is the eighth wonder of the world, yet people never do it due to their loyalty (and because it takes forever to do). But you can cut down your expenses by hundreds of Rands when you actually stop being loyal to your current providers. A depressing fact is that companies typically give the best deals to newcomers. Interestingly, the longer you are with a provider, the higher your premiums are likely to be. So, switch and not only get a cheaper deal, but a better one. Who doesn’t want car insurance, entertainment, or homeowner insurance for less? Review your insurance providers, cell phone providers, bank charges etc.
Start Building an Emergency Fund Now!
The budget may be tight this month but that will change as the year progresses. Building an emergency fund as soon as you can afford it is imperative. Things can and do change in an instant, including your financial state. So, having a financial safety net is the only way you can solve the issue without getting into unexpected debt in 2020. It’s never too late or too early to start saving. Even R100 a month to start with. It’s never too late or too little to start saving! Save now!
Create A Budget
Money is tight but the family’s needs must be met. Knowing exactly how much is coming in and how much is going out is the best start to reduce your financial woes. All you need to do is get all your financial records together and see where you can cut back without affecting the family’s necessities “basket.” And remember to add “savings” in your expense’s column. This is a great way to get the kids involved and teach them how to save on expenses and budget.