How To Grow Your Savings In A Post-COVID World?
6th November 2020
In a year where the words ‘coronavirus’, ‘social distancing’ and ‘furlough’ became part of our everyday language, many of us have found that our finances have been stretched to almost breaking point.
Wages have been slashed, work contracts have been terminated and pay rises that you were expecting have not materialized. There are very few people whose finances have not been affected in one way or another by the COVID-19 pandemic, and it has been challenging.
However, let’s look on the positive side here. Eventually, things will go back to normal, even if that normal looks a little different. It may not be this year — it probably won’t be this year. It may not even be next year, but at some point, normal life, even if it looks a bit different to what normal was like pre-COVID will resume, and so will economic activity. When this happens, you will probably be desperate to resume building up your savings, or if the pandemic has decimated them, start building them again.
Here, we are going to look at how you can build up your savings in a post-COVID-19 world.
Any decent money blogger will tell you about the importance of shopping around to save on things like car insurance and energy bills. When it is coming to renew your insurance, whether it’s for your home, car, contents — use a search engine such asmoneysupermarket.comorcomparethemarket.comto find the lowest deals. You may find that your current provider is no longer the cheapest. However, it is also important to bear in mind that some companies are not on these comparison sites, so it may be worth checking a few out independently as well. If you find a quote cheaper than your existing policy, let them know — they may offer the same or lower.
You can also shop around for the lowest price on your utility bills — the two comparison sites we mentioned above can help you with this, as can places such asuswitch.com. Any money that you save on these can be then put into your savings pot.
Diversify your portfolio
If you dabble about in investments, you will hopefully know the importance of diversifying your portfolio. If you don’t, or you are just thinking about making the leap into investing your money, now is the time to look at your options.
There are investment types to suit just about every budget and level of involvement. Whether you want to buy a property and be a hands-on landlord or buy some stocks and shares and leave them to do their own thing, you can build up your savings pot this way. However, it is always important to be aware that no form of investment comes without risk, and you do need some capital upfront to be able to do this. If you can invest though, the returns are usually more than worth it in the future.
Set a budget
It sounds really simple, doesn’t it? However, if it was as easy as it seems, few people would have problems with making their finances last. No one is born knowing how to manage their money, and unless it is taught to us, or we have ti figure it out ourselves. However, if you can get to grips with it, it is one of the most simple and most successful ways of making your money work for you, and hopefully, giving you spare money to put into your savings pot every month. Start off simple; make a list of all of the money coming into the house each week or each month, and all of the regular outgoings: rent or mortgage, utility bills, credit card and loan payments, transport costs, grocery shopping, childcare and so on. Then, look back at your bank statements and look at what else you are spending your money on. Is there money left over in the budget to be able to buy that takeaway coffee every morning, or should you put it into your savings?
Add to your income
If you earn money you have more money. If you have more money, you can save more money. The obvious solution to this is to increase your income. In an ideal world, we would all go to our boss and ask for a big pay rise, but if you are lucky enough to still have a job, that’s probably not going to work. What you can do, however, even in a time where jobs are hard to come by, is to do ‘something on the side’. If you are pretty nifty at building websites, you can offer your services on freelancer work platforms, Perhaps you love ironing — maybe you could offer this as a service? Think about your talents and interests and see if you can make a little bit of extra money doing this. Remember, all income needs to be declared to the HMRC and you may have to pay tax on it.
Cut your spending
If you can’t get any extra money, then you need to cut your spending. Most people, if they try hard enough, can make savings in some areas. We have already talked about setting a budget and looking around for the best deals but look at doing things like cutting out all those streaming package subscriptions, dumping the gym membership when you can and taking up running instead, taking a packed lunch instead of buying expensive meal deals from the shop and cooking at home rather than ordering a takeaway.
It doesn’t really feel like it at the moment, but soon, things will start returning to normal and we will all be looking at how we can help our finances to bounce back. These tips will give you a bit of a head start towards rebuilding your savings and helping you to get on the right foot with your money.