You have probably heard that old tip that you should always save some money for emergencies and other unexpected situations. Doing so during the pandemic that hit the world in 2020 is even more important than ever in recent history. However, now, when most stores have switched to online shops, spending money on things you don’t need was never easier.
According to RAND analysis, 40% of Americans have spent more money online than they used to before the pandemic. While 20% did cut down on their expenses, a high percentage of people spend more than before. It might relate to a simple situation. The pandemic has definitely imposed a rather mundane and boring lifestyle on many. Thus, online shopping might be the thing that keeps them excited.
That’s why you have to think about how you spend your money and come up with a basic strategy that will help you save some much-needed cash. Stay with us, and we’ll give you a few tips on how to do precisely that.
Saving Money During the Pandemic Tips
Start Recording How Much You Spend
Overspending is a problem for many people, even when things are normal. Spending more than you planned is much easier to do when shopping online. That’s why it’s crucial that you track your spending to figure out your monthly expenses. That includes household items, buying food, coffee, clothes, and so on.
You can break things down into multiple categories such as food, gas, mortgage, and so on. Double-check all spending by using your bank statements, just to make sure that your tracking is accurate as possible. You can even download a free spending tracker app to simplify things even further.
Create a Savings Budget
When you figure out how much you spend in a month, you can set up a budget. It should always be enough to cover your expenses, but you should also focus on limiting overspending. Like you created spending categories for different expenses, you should add one more category to your savings.
The total amount you should save should be between 10 and 15 percent of your total income. That will give you an entire salary of savings in a year, which will be a hefty sum of money in a few years.
Cut Your Spending Everywhere You Can
If your basic expenses take up your entire salary without anything left for savings, you should think about cutting back on all nonessentials. That can relate to video games, dining out, going to the cinema, and so on. If it’s not something you can’t live without, you can eliminate or limit it. You can also get a cheaper cellular package, cancel your Netflix subscription, and so on. After a month or two, you’ll know which expenses you can live without and save more money.
Set Clear Goals
Saving money means nothing if you don’t set a clear goal. Start thinking about why you want to save money. Is it because you want to get married or maybe go on a vacation with your family? Or do you need some extra cash to secure your retirement? Once you figure out why you need the money, you should make short-term and long-term plans.
For example, short-term plans might be like an emergency fund, a vacation, or a down payment for a vehicle or property. Long-term savings will give you more freedom to plan your retirement, education for your kids, and so on. Whatever your motivation is, you should always start small and work your way up over time. Just don’t spend all your money on the first goal.
Bad Online Shopping Habits
Online shopping is tricky. Things can go out of hand pretty quickly, and if you’re not careful, you will burn through your entire savings fund in no time. That’s why you should “cure” all bad shopping habits before you start saving money. Here are the usual issues you’ll probably have to face.
Financing your cravings with dept
The worst thing you can do is go into debt to buy something you don’t need that much. It can be a PS5 console or a new set of wheels for your car. Even if the price is affordable, if you don’t need something, ignore it, or you’ll never save the money you need for something else.
Buying stuff on sales deals
You will often run into online sales where you’ll find all kinds of items for affordable prices. While some of them might be a good deal, you should always think about saving first. If you simply spend your money on more items than you usually would, you’ll end up with zero savings. Don’t let your emotions take over, and always think twice before buying anything. You can also use tools like Honey to find discounts and the best deals easily. However, try not to be tempted by various offers for stuff that you do not really need.
You should also be very careful about where you buy stuff online. Always make sure that the store in question is legit, has advanced security features, and good user reviews. Leaving your personal information on a shady website can lead to a whole lot of trouble in the future. You can also use tools like Atlas VPN to ensure that your communications remain private. This app can also help you find better deals if companies use price discrimination to adjust their prices.
With a little bit of self-control, a clear savings goal, and detailed expense tracking, you’ll be able to save a lot more money than you think possible. Just stick to these simple rules, and always remember to think twice before buying anything you need if you want to reach your goals. It’s as simple as that! Of course, one-off splurges are understandable. However, you can try a rather easy trick. When you are tempted to purchase something, do not do it right away. Leave it and return to it a few days later. Is the urge to get the item still strong? Usually, it will not.