A rainy day during a poor economy.
Personal Finance

Handling Your Finances In A Down Economy

Is the economy taking its toll on your finances? You are not alone, but there are some steps that you can take to prevent major damage. Take a look at some tips that can help you handle your finances in a down economy. They could be a lifesaver.

Let’s get right to it. Money is tight and you need to stretch out what you bring home to make ends meet. There are a lot of strategies that can help you do just that, it will just take a bit of planning and maybe a little discipline on your part. Take a look at some of the steps you can take.

Trim Your Budget

If times are rough, you need to be spending as little money as you can. Even if you think your budget is pretty tight, there are likely still many ways that you can save more

Food

First, take a look at that food budget. This is an area where so many people waste money. Yes, you need to eat, but you need to spend your food budget wisely.

For starters, start meal planning. This is actually easier than you might think. Just write down all of the meals that you plan to make during a week and then make a list of the exact groceries that you will need to prepare them. This allows you to buy just what you need and cut out wasted purchases. It will also make your life easier because you will always have what you need, no more pesky lat minute grocery trips.

Next, look at meals out. You should eliminate them. Start making all of your food and preparing a lunch to take with you to work. Prepared meals, especially those at a sit down restaurant are just too costly.

Finally, switch to generics. This can cut nearly 30 percent off of your food budget if you are accustomed to name brands. Keep in mind that many generics are made by big brands, you just do not get the fancy packaging.

Insurance

This is another area where people waste money because they get complacent. That plays right into insurers hands as they slowly increase your premium each and every year. Take a half hour and call three other insurers and get rates. If you have other policies like home owners or renters insurance, shop them together for bundle discounts. You might be surprised at just how much money you are wasting.

Other Expenses

Everything is fair game when it is time to trim the budget. If you have cable or satellite, cancel it and switch to a streaming service. If you have a gym membership put it on hold or switch to a budget gym.

In short, analyze every expense and look for savings.

Boost Your Income

Everybody says that they want to make more money, but very few act on it. Even in a bad economy, there are ways to earn, you just have to be willing to do the work. Not all of these jobs will be glamorous, but they pay.

One example is retail. Stores like Walmart are always hiring and, with more people eating at home, they are busier than ever. Stock shelves, work a register or fulfill online orders. Just picking up one shift a week can bring in 400 dollars a month. Get 5000 dollars in extra money each year.

Another example might be to start a side gig of your own. Have you ever though of going into business for yourself? Now may be the time to do it by going into one of the many low startup cost businesses. Businesses like painting, lawn care and even web design take very little capital to start. These businesses are also flexible enough to work around most full time jobs.

Whatever you want to do to make more money is fine, just be sure to get out and do it. Even if you are making ends meet now, you never know when that could change.

Save More Money

This one doesn’t apply to everyone but, if you are currently making ends meet, start saving.

The only thing certain in this economy is uncertainty. You might have a good job now, but you never know when that can change. And, with the unemployment rate as high as it is, the competition for a new job would be stiff.

Once you have that budget trimmed down to the bone, start diverting money into an online savings account. Choose an online account instead of a local one to protect your savings. It takes a full business day to make a transfer from one of these accounts. This keeps your money convenient but unavailable for impulse buys.

Consolidate Debt

If you are living with credit card debt, now is the time to address it. The average interest rate of a credit card is 17 percent but you may be paying as much as 29 percent.

This is an insane amount of debt to carry, but many people just consider credit card payments a normal part of life. They should not be.

If you have good credit, get rid of this debt by taking on a debt consolidation loan. With an interest rate of 5 to 6 percent, you can save hundreds of dollars of interest a year. Money that can help you pay that debt down fast.

If your credit is not so good, likely because of this debt, choose a debt payoff strategy and stick to it. Debt reduction methods like the snowball method or avalanche method can be very useful in motivating you to finally get out from under your credit cards.

Have A Plan

Finally, have a plan. Don’t think that you are immune from losing your job or at some part of your income. If a disaster happens, you need to know what to do in order to minimize the damages. What bills will you cut, how do you file for financial assistance, what other income can you add quickly? These are among the questions that you should ask yourself now before a crisis happens.

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