Money can be a slippery customer at the best of times. Maybe we don’t quite hit our projected income targets for a certain period. Perhaps we ended up spending a little more than we would like to. Or it could be that we simply can’t pin down the reason our finances don’t quite add up. |
This is because money management is... well, it’s tricky.
Factor in global issues like Covid-19, and it becomes even more tricky. The coronavirus has had far-reaching effects across the planet, causing death, misery, social division, and economic depression.
When faced with something like this, keeping on top of our finances becomes more than tricky – it becomes downright difficult. Difficult, yes, but not impossible.
It all comes down to adopting the right approach. We are talking about confidence and positive attitude, of course, but we are also talking about practical solutions to make us financially resilient, even in the face of such challenges.
And this is crucial. This is how we are going to re-stimulate the economy – both in our home countries and across the globe – as we push through this difficult situation. This is how we – all of us – are going to do more than survive – we are going to thrive. It all begins when we empower ourselves, and our finances.
Let’s take a look at some of these practical money management tips.
Be Realistic with Your Short-Term and Long-Term Budgeting
Now is the time to bone up, and to really get to know your finances. You need to know your current income situation, how it has been affected by the virus, and how your finances will fluctuate in the near future.
It is crucial to avoid the debt trap here. Sure, it might seem like putting a load of purchases on a credit card is fine because you know that, when things pick up again, you’ll pay it off. But make sure this is a last resort. Instead, consider how you can keep yourself thriving even when your income has taken a hit.
This requires realistic planning, and a proactive approach to spending reduction, at least in the short term. Be sure to put pen to paper on your budget plan. Making the plan real in this way makes it much easier to follow, and you will, in turn, find it easier to keep your finances healthy.
Leverage Any Assistance You Need
None of us are alone in this crisis. We share the burden, in our communities, our nation states, and right across the world. We are in this together, and it’s important to remember that.
This is why, if you need and qualify for help, it is important that you access it. Local, state, and national governments offer a wide range of assistance packages and policies designed to help those who may be in need.
We’ve all been affected by this crisis, and it does not make sense to suffer alone. Speak to your local government representatives, or go online to find out more about what is available in your area. A little bit of help can make all the difference.
Readjusting Spending on Luxuries
Again, this tip comes down to knowledge – knowledge of yourself and what you really need.
Of course, there are standards of living to be maintained. We’re not saying that you need to eat only a bowl of porridge every day, and that anything else is an extravagance. No. Instead, we advise considering what you need to maintain a standard of living close to the one that you and your family are used to, and rolling back on unnecessary spending.
You might find yourself at home a little more often than you would like, and it’s tempting to hit the online clothing or gadget stores in search of a bit of retail therapy. There’s no harm in this occasionally, but make sure to keep on top of it and that it is in line with your written budget plan.
Look for WFH Tax Advantages
Are you working from home? Well, this may dramatically change what you can claim for against tax.
Any purchases you have made to improve the working environment in your home can be claimed back against tax. In fact, the ATO have introduced a raft of concessions, advantages, and potential payment deferments, designed to make life easier for small businesses and the self-employed.
Consider Diversification of Income
The internet affords us a wide range of opportunities. Even if you are not able to get out there and pursue your more usual revenue channels, you may still be able to boost your income through investments and remote or web-based work.
Maybe you will decide to use an online investment platform to carefully grow your assets. Or perhaps you will begin offering freelance consulting services online. At first, the returns may be small, but diversifying your income in this way will help you to stay protected in the future.
Learn from the Experts
There is always more to learn. There is always more to add to our experience. This is why it is so important to gain the advice of the experts.
Read up online, check out expert webinars and online sessions, speak to mentors and inspirational figures, and get the insight you need to really thrive.
These are tough times, but being positive is the only option. Together, we’ll get through this.
Det David Love is a consultant with Money Mastery International, a financial education consortium. MMI offers live workshops and seminars designed to help people become financially independent. The instructors are professionals and business entrepreneurs who take a wholistic approach to financial literacy by exploring the psychology of money, practical money management methods, and time-tested wealth-building principles.
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