Tips & advice on getting your finances back on track.
As the COVID-19 pandemic begins to ease, and the country gradually starts to open up, our lives have the hint of returning to something resembling normalcy.
Whether you have been working from home, or you’ve been furloughed or laid off, the last few months have changed the way we have been spending our money. As the social distancing restrictions begin to lift, now is the time to look at your budget and how it’s changed in the last few months. This is a great time to start fresh with a new budget.
During the pandemic, many small businesses closed and services were suspended. So, even if you wanted to go to the gym or get your nails manicured, you couldn’t. This may have felt annoying at the time, but your bank balance was probably quietly celebrating.
Weather your budget was slashed due to a loss of income or just the fact that you were stuck (safe!) at home for the last few months, incorporating some of your new habits into your budget moving forward can bolster your savings.
Let’s take a look at some of the budget categories that you may like to reconsider in your new post-pandemic budget.
Commuting costs: While the price of gas has plummeted during the COVID-19 shutdown, the price is sure to inflate again over the next few months. What doesn’t have to increase back to pre-lockdown levels is how much you drive your car. Some companies, such as Twitter, have announced that they are allowing their employees to work from home permanently if they so choose. More companies, especially in the tech industry are expected to follow suit. It is estimated that currently 33% of employees are working from home, which is up from 4% before the pandemic lockdown.
Imagine if you didn’t commute to work every day. Perhaps working from home even one or two days a week is an option for you. If you worked from home two days a week, you would save 40% on your gas or commuting expenses like tolls, train tickets and cabs.
In addition, there is the added environmental bonus of having fewer cars on the road. A new report published in New Scientist shows a 17% reduction in carbon emissions between January and April compared to 2019 values. That’s something we can all be happy about.
Car Insurance: Driving less will also allow you to reduce your car insurance premium. Most insurance companies base their cost of insurance partially on how much you drive and principally on the length of your daily commute. Less commuting means a lower insurance premium.
Cost of Food: With the restaurants and bars closed, and most people eating more at home, there is a significant decrease of money spent in this budget category. Once the restaurants and bars open up again, take a breath before your rush out with your friends to reconnect and dine out. How many times did you dine out before the pandemic and what were your savings once you were quarantined? Think about what you could do with the difference, if you decided to dine out fewer times each month.
By the way, cooking more at home doesn’t have to mean cooking every night. Make a double batch of something and freeze half for another night. Pull it out of the freezer when you’ve had a long day or you know you will be working late. This is great economics of both your time and money.
Cooking more at home after the restrictions are lifted doesn’t mean doing so without your friends, either. Invite them over, have a potluck or grill together. Try to make a commitment to a new post pandemic budget that doesn’t leave you feeling like you’re missing out, but puts a little extra in your savings account.
Take a look at some of our tasty budget meals recipes here to help get you started.
Working out: Gym memberships are one of those expenses that are a waste of money if you don’t actually go to the gym. If you were a regular gym goer before the pandemic, good for you! But, how did you fare without your gym? Did you find an alternative that you enjoyed just as much? Youtube has lots of great workout content and it’s free. Could you live without your gym membership?
Beauty routine: I saw many comments online about people cutting their own hair during the pandemic. While that seems a bit extreme for most of us with limited hair styling skills, what did you manage to either take care of yourself, or simply do without? If you managed to give yourself a perfect pedicure while catching up on Netflix one night, then do you need to get that pricey one done every few weeks from the salon? Think about where else you managed to find a DIY alternative to the salon that you normally frequent.
Don’t just limit your budget makeover to these categories. Go through all of your normal expenses and find the places you can adjust your budget. If you don’t have a budget or aren’t sure where to start, here are some great guides and articles that will get you on the right path.
Once you’ve created a fresh budget, what will you do with the extra cash? The short answer is do something meaningful with it! Don’t blow it on impulse shopping or random spending. Use this money to establish an emergency fund, pay down debts faster or save for your future. Make that extra money count!
Lori Stratford is the Digital Media Manager at Navicore Solutions. She promotes the reach of Navicore’s financial education to the public through social media and blog content.