Some of us may have things in place that help us manage our money for positive results… And others may have things in place that result in us experiencing financial issues.
The impact of the way we manage our finances is amplified during challenging times, where we may see the effects of it more.
No judgment is being passed here - After all, this isn’t a topic we were taught about in school… But it is something we can actively seek to learn.
Nevertheless, managing our money for positive results is key to us avoiding financial stress… Especially during times where we may be in a financial squeeze.
The great news is that there are a few steps you can start putting into place straight away to begin managing your money to create a more stable foundation during uncertain times.
Schedule a monthly personal finance review
Your financial situation can change rapidly in a short space of time, especially if you are self-employed or end up taking on extra monthly costs.
Although small changes may not create a huge difference in the matter of a month, it may start to compound over time where you begin to see the real impact of the change. Setting a monthly personal finance review will help you spot how you're doing financially before the sh*t hits the fan.
If you haven’t done one of these before, take some time to yourself in the coming days and look at what you are spending and earning.
Think about ways you can be more effective with your money.
Or if you need to increase your income, start doing some research on how you may be able to do this… If the job landscape has changed, see if you can research some new opportunities that may serve you well at this time.
Doing this will put you in the driver's seat and allow you to start managing the situation at hand more effectively.
Start building a financial buffer account and protecting your money
This may sound counterintuitive during challenging times, but starting the habit of paying a small percentage of your income into a separate account, with the intention of creating a financial buffer, could be the best money management decision you make. The amount can be as small as you like to start and can be transferred over during your monthly finance review - It’s the habit that counts.
You could set a target to slowly create a buffer of 3-6 months worth of operating costs to give you breathing space during uncertain times. All to build a financial moat around you to help avoid being affected by external events as much.
You can also build a strong moat around your finances by making sure they are fully protected from hackers. Start using a contactless card scam blocker wallet to avoid your money being stolen by hackers who can swipe money off your contactless cards without you even knowing.
Widen the gap
If you are experiencing financial uncertainty in any way, it is a great time to start widening the gap between what you earn and what you spend. But where do you start without losing your marbles?
I would recommend starting with taking a look at any subscriptions you have.
Do you have a gym membership that you haven’t used for months? Maybe you could start working out at home instead and save the monthly expense.
What about entertainment subscriptions? Are there any free alternatives, or maybe it’s time to just press pause on them whilst you get through challenging times.
Whatever it may be, carefully review the recurring subscriptions you have and ask yourself if you really need it right now. If you need help drawing the line, geta friend to help you assess things.
Next, I would look at my monthly utility bills.
Are there any providers that can give you the same service for less cost? Maybe it’s time to make the switch to another company.
You could even think about calling your current providers and attempt negotiating what you pay, especially if you are coming up to the end of a contract. Most companies won’t let on to this, but things are more negotiable than we think.
I would then move on to look at my other spending and ask myself if these things are truly necessary at these times. Remember, anything you cut right now can be reinstated at a later date when things are more stable. Nothing is permanent here and can be reviewed in your monthly personal finance meeting.