Five personal finance tips to get you through a crisis

Almost everyone is going through some tough times at the moment. But one of the upsides to the current pandemic is it gives you time to step back and re-evaluate your life. Are you where you wanted to be at this particular time? Have you archived the goals you set for yourself five years ago? If you are falling short, you have free time available to readjust and set a different plan into motion.

It is not in the least helpful to say to someone, “You should have been saving for a time like this all along.” Nothing can change the past. What is important is today and tomorrow. However, saying, “You should learn from what you are currently going through”, is both motivating and on the other hand, not demeaning.

1. Start With A Budget

Whether you have much or you have little, a budget is always a good idea. Put simply, a budget is a spending plan and also, but most probably not feasible in this context, a saving plan.

Find out how much you have and list all your expenses. Among your expenses, cut-off wants and keep only needs. In other words, categorise your expenses into those that are important and urgent and those that can be delayed or eliminated all together. Ask yourself what small luxuries can you do without. The more you cut, the longer you can make your savings last.

Figure out the different payments that contribute to your credit score so you can take advance measures to keep your numbers high. This will help you when you may need a business loan, personal loan, credit cards and even insurance premiums, which all depend, at least partially, on your credit score. Failure to do this means you may end up not qualifying for credit and you could quickly find yourself paying exorbitant interest rates.

2. Don’t Panic Buy Or Impulse Buy

Panic buying is counterproductive. It is a direct manifestation and a reflection of a lack of a proper budget and financial plan.

There are things you can buy in bulk and save, other than that, buy what you need and have budgeted for and no more. Stick to the short-term plan and budget you’ve created. The budget will be useless if you don’t stick to it.

Panic and impulse purchases, particularly ones with big price tags, can derail your financial plan in a hurry. Staying disciplined is not always easy, but it’s the only way to achieve your goals and see you through.

3. Do Things Yourself

Conveniences come with an added cost. Making your own cup of coffee at home is cheaper than buying one at a cafe. And driving to pick up your goods yourself instead of having them delivered to our doorstep is sometimes much better.

Take care of all the small, menial tasks that are worth your time and money and leave what’s not. Choose to be inconvenienced rather than suffer a convenience charge.

In a crisis, every cent counts and other items can really add up quickly, and thus might be worth doing yourself or doing differently. More time at home means less of an excuse to avoid learning to cook, clean, conserve and reuse.

4. Declutter Your Life

Find ways to rid yourself of clutter and benefit financially at the same time. This also has the added advantage of simplifying your life and home and making it more aesthetically appealing.

Ask yourself if you really need everything that you have stored away. You could use online trading sites to unload unused and not-needed things and make a few bucks in the process.

If you cannot or do not want to sell, consider giving things off to someone in need of them or to charity. You will not get any money but you may start a pay it forward chain. It is at times like these that the communal spirit has to shine even brighter. Lending a hand to someone else also helps you to put things into perspective — to know that you are not the only one going through tough times and that eventually everything is going to be alright.

5. Make Manual Payments

It is typically recommended and “convenient”, to automate bill payments and savings. But if you’re short on cash, it’s a good practice to make manual payments instead. This ensures that you are in full control of every cent you spend and can best implement your budget while doing away with some costs of convenience.

When you un-automate your payments, it is important that you sign up for bill reminders wherever possible so that you don’t miss any crucial payments and incur extra charges.

Get rid of double expenses, for example, if you have Netflix and DStv, both these two serve the same purpose. Choose one that you prefer more than the other and temporarily cut the other until you can afford it.

Also, go through your bank accounts and look for recurring subscriptions for charges of things that you might not want or use anymore and cancel them.

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