Here are some practical ways to keep more money in your savings account
With the coronavirus still impacting the world, we are still facing a time with economic uncertainty. Even with the recent growth in the stock market, recently we've seen some downturn within the economy.
With many jobs at risk, it has never been a better time to focus on saving and cutting down on unnecessary expenses.
Many of us are currently remote working from home, so there are a few more things we can do to save more money into our bank account that we might normally not be able to do.
Personally, I have been able to save more money during the coronavirus. Not only have I saved but also identified ways I have been wasting money in the past.
Here is a look at some practical ways you can save more money.
1. Save money on your motor vehicle
In a time when driving is not needed as much, one of the first things you can do is take a look at your current insurance plan.
Pay for lower insurance premiums
There are many providers of insurers that price based on how much you drive your vehicle. The longer your commutes or how far you drive, the higher the risk of getting into an accident (of course!), which directly correlates with your premium prices.
In a time when we are not driving to work, lowering your insurance cost may be a viable option to save a bit of money.
“When the car isn’t being driven, there’s hardly any risk,” said Dan Karr, insurance industry watchdog and CEO and founder of ValChoice.
The first logical choice is contacting your insurer to see if you can make the adjustment yourself or otherwise make the change accordingly if your premium is coming up.
Savings will vary case by case, and you most likely will need to change your premiums back once you have to go back to driving at the same frequency as before, but for now, this will not likely be coming anytime soon.
2. Cook your own meals
If you’re on a food subscription, it might be time to cancel this.
Even worse, if you’re ordering takeout a few times a week or more (like some of my friends), it’s also time to rethink this choice.
With more time at home, cooking is a viable option to save money.
But how much can you really save?
Looking at the data below, you’re saving almost an average of $10–15 a meal both from meal kits vs. takeout from restaurants. This could easily add up to savings in the hundreds if you’re a takeout food fanatic.
Take a look above, and you might see your favorite meal there and the comparisons around homemade vs. a meal kit vs. a restaurant.
3. Balance out that budget — Cancel any subscriptions you don’t use at home
If you’ve never made a budget or you don’t stick to it, it’s time to revisit this.
This means doing a calculation of all your expenses, especially nonessential services.
It has never been so important to have enough cash to cover your most essential expenses in a time where job security is uncertain. This is especially important if you’re currently in an industry that is profoundly affected by the coronavirus situation like travel, hospitality, or tourism.
“The typical recommendation is to have enough cash on hand to cover three to six months of your necessary expenses,” said Andy Panko, Certified Financial Planner and owner of Tenon Financial. “Now is a good time to update your analysis and assumptions as to whether three to six months is enough.”
Remember to check your subscriptions
Subscriptions are easy and great to sign up to but can start to eat at your account if you don’t pay attention.
If you can’t recite all your subscriptions off the top of your head right now, you need to make a list. Additionally, if you can’t justify the value of the subscriptions, it’s also time to reconsider these.
Here is a checklist of areas where you could be subscribing to currently:
- Google Play or iOS subscriptions — if you have any now, especially if they’re social or dating applications, it might be smart to cancel them
- Amazon subscriptions — with so many subscriptions including its Appstore, Kindle, Prime and more, you need to ask yourself if you need this at the moment
- Gym memberships — there are more than 62.5 million gym members across the world, and if you haven’t frozen your membership now (or if your gym hasn’t automatically done this), it’s time to do so
- Food subscriptions — less common but also something to explore. With so much time at home now, there is no reason not to make your own meals
- Any other games or technology subscriptions you might be subscribed to
4. Sort your loans out — refinance your home loan, cancel credit cards with fees
Similar to sorting out your budgets and expenses, getting on top of your loans, including your credit cards, is essential.
More than 189 million Americans have credit cards with an average cardholder owning at least four cards (I am guilty!). With millions also involved in some kind of mortgage, it’s probably a good time to explore a few options here as well.
Cancel any credit cards with fees
Many credit cards these days have fees attached.
A lot of these cards are tied to a travel or rewards system based on an airline or bank.
In a time when traveling is not needed nor excessive spending, canceling these cards to avoid fees might be a good time, especially if your annual fee is coming up.
Refinance or reduce your repayments
Generally, repaying your debts quicker is better.
If, however, you want to be safe during this coronavirus situation, looking for your repayments to be reduced a good easy first step in reducing the impact on your savings just in case you need to weather the storm (e.g., losing your job). With interest rates at record lows, it’s a great time to consider this.
If you want to take it one step further, refinancing your home loan may be a viable option as well.
Most banks right now are offering assistance, so speak with them to see what the best option for your financial situation is.
5. Make some extra money
I mean technically you’re saving money if you’re making it too, right?
With more time on our hands, instead of putting on that Netflix show, why not explore some ways to earn a bit of cash and help cushion your savings account. I have personally been taking more freelance work to help make a bit of extra money.
There are many ways to make money from the side gig economy, and many look to it as a viable alternative to full-time employment.
62% of millennials who would willingly leave their employers within the next 2 years regard the gig economy as a viable alternative to full-time employment (Deloitte)
There are some awesome sites to try including Fiverr, Upwork, Freelancer, and more.
Although many of these tips may be straightforward on paper, a lot of them are things you should do but are probably not actioning.
Being able to save enough money can put less stress off your back, especially if things do go wrong.
Making sure you manage all your finances, including your budgets and expenses, loans as well as other miscellaneous costs is essential in saving money in the current uncertain economic situation.