Personal Finance

Tips for saving money during unusual financial circumstances

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If your bank account looks different than it did a few months ago, you’re not alone. Millions of workers have been furloughed or or let go abruptly, leaving many to navigate a rapidly changing financial landscape. Others find themselves with a little extra cash because they’re no longer going to restaurants, splurging on spa days or taking vacations. 

Whatever your situation, now’s a great time to do a financial reset and find ways to invest in your future. Here are a few tips for saving money in, as they say, unconventional times. 

Budget, budget, budget

The first step to saving more money – whether you have a steady job or not – is making a budget. If you’re good with spreadsheets, you can start with Excel or Google Sheets. If not, there are plenty of free apps out there that can help, like MintGoodbudget and Personal Capital

Try to categorize and limit your spending to the basics: food, shelter, utilities, medical necessities and transportation. If an expense doesn’t fall under one of those categories, skip it for now. Retailers are offering some eye-catching sales to keep their profits up, but ask yourself if you really need those new boots/headphones/heated nightlight toilet seats to survive. If the answer is no, don’t buy. If it’s yes, look for coupons or promo codes on sites like Honey and RetailMeNot before making your purchase to see if you can score a discount.

If your budget shows a surplus, consider donating to a favorite charitable cause – many service organizations are working harder, with fewer resources, than ever. Alternatively, use a month’s worth of takeout budget to pad your rainy-day savings account, or even dip a toe in the stock market. [Link to investment article when live]

Cancel subscriptions and memberships

Are you still paying for a membership to your gym even though it’s closed? Do you subscribe to a personal styling service for clothing? Let’s be honest, you haven’t worn real clothes in over a month now. Stop paying for of-the-month style wine/fruit/beauty subscription boxes. Those services will be happy to take you back when you decide it’s financially feasible. Can you do without those magazine, newspaper, smartphone app subscriptions? Do you really need cable, Hulu Plus, HBO Go, Netflix, Pandora Premium, Spotify Premium and Amazon Prime? Beware of “subscription creep.” Paring down your monthly subscriptions could save you hundreds every month.

Cook for yourself

Your pocketbook may have a little extra padding since bars and restaurants have limited their services considerably. However, with many establishments offering delivery and pick up options, it’s still possible to spend more than you need to on food. Keep it simple by planning and cooking your own meals at home. Crack open those cookbooks you’ve always said you’d use and try a few new recipes. It’s an easy way to save a few bucks when you’d rather be adding to your savings account.

Make your own discounts

Just ask! Call your cable company, cell service provider, even your utility companies to negotiate a better rate. Do some research to see if you can find competitive offers from similar providers and ask your company to match. Mention that you’re a good customer with a history of paying on time; explain that you’re prepared to walk away from your existing plan. Chances are they’ll offer you a better deal. If not, you’ve already done the research and scoped out a lower price elsewhere.

Put your bills on autopay

One of the easiest ways to save money is to look into all of your current bills to see if the company provides discounts for autopay. For example, Verizon offers customers a “$5 or $10/month per line discount” when they sign up for autopay and paperless billing. When it comes to car insurance, drivers can save about $24 a year when they take advantage of automatic payments. Another benefit to autopay is that you’ll avoid unnecessary late fees because your payment will automatically be deducted each month when it’s due. 

Sell your stuff

Look around your house and yard. What do you own that you no longer need or use? Sell clothes, shoes, and handbags on resale sites like Poshmark. Facebook Marketplace is a great way to sell household items and memorabilia. Feeling nervous about meeting up and exchanging payment while adhering to social distancing guidelines? Advertise porch pick up and request payment via Venmo. Other smartphone apps like OfferUp and LetGo allow you to sell your stuff easily and safely.

Start a side hustle

In normal times, you could walk dogs, deliver food, or Airbnb a room in your place for extra cash. And even though things aren’t “normal” right now, that doesn’t mean you can’t get a side gig. There are plenty of jobs you can do without leaving your couch, like transcribing, customer service, virtual tutoring or freelance writing and design. 

Now could also be a great time to explore your creative side for some extra cash (provided your supplies aren’t a huge expense). Always wanted to sell your homemade candles/jewelry/woodcarvings on Etsy? Do it! Craft that business plan you’ve been mulling over for years. When quarantine ends, you’ll be ready to take the next step.

See if you qualify for federal assistance

The Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) recently freed up billions of dollars to help individuals and businesses. In addition to the much-discussed stimulus check, workers laid off due to COVID-19 are eligible for increased unemployment benefits, including higher payouts and extended eligibility periods. Furthermore, self-employed, gig workers and freelancers are newly eligible for unemployment benefits.

The Supplemental Nutrition Assistance Program (SNAP) has received millions more from the CARES act for food banks. Check with your local food pantry to see if you qualify to shop there.

Reduce regular payments

Student loans

The CARES act also states that all federal student loans will be suspended and interest on these loans won’t accrue through Sept. 30, 2020. If you have student loans, you might be able to reduce your payments each month and save a good amount of money per year. First, look into your repayment plan options. An extended repayment or income-based repayment plan may help lower your monthly payment (however, if you’re increasing the repayment terms, you’ll pay more interest over time).

Also, consider consolidating your loans. Consolidation means that you’re combining all of your current student loans into one big loan with one payment. This can potentially lower payments because you might get a better interest rate (especially if your credit score has improved since you first took out the loan!). Then, you can put that money saved into your emergency savings and feel better about the future. 

Rents and mortgages

With COVID-19 affecting the global economy, landlords and mortgage providers might be more willing to work with people who are recently unemployed or have reduced incomes. If you have a federally backed mortgage, the CARES act includes a foreclosure moratorium and a right to forbearance for people who are experiencing financial difficulties because of COVID-19. Check out the Consumer Financial Protection Bureau’s (CFPB) website to learn more about what steps you need to take for mortgage relief. 

If you don’t have a federally backed mortgage, you should still contact your mortgage provider to see how they can work with you. The CFPB has encouraged financial institutions to work with borrowers who are struggling to meet their financial obligations because of COVID-19. 

If you’re a renter, talk with your landlord about potentially splitting rent into multiple payments if you can’t afford the whole thing at the beginning of the month or ask about reduced payments for the time being. 

Insurance

You should be evaluating your homeowners and car insurance regularly to make sure you’re not overpaying. We recommend evaluating your homeowners insurance every year and your car insurance every six months. You could potentially save hundreds of dollars a year by lowering your premiums. 

We also recommend calling your current insurance before committing to another provider to see if they can offer you a better price (especially if you’re commuting less). They may be able to match or beat what another company is offering. When you’re on the phone with them, make sure you’re getting every discount you’re eligible for. 

 

By first understanding how much you spend every month and then being able to save a few dollars here and there, you’ll be able to save for your future (even when life feels weird and uncertain). And when things pick up again, you’ll have created great budgeting and savings habits that could help you out for years to come. 

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