Subscribe Us


5 Tips to Save Money During COVID-19 Crisis

The COVID-19 crisis has caused immense disruptions in our lives, not just to our jobs but to our health as well. Businesses have been forced to temporarily shut down to support efforts in containing the COVID-19 pandemic, with some even ceasing operations due to the huge losses incurred during the community quarantine.

For Filipinos living paycheck-to-paycheck, the abrupt loss of income brings heavy financial strain. It’s important to review your expenses and see where you can compromise to save some bucks or to at least keep your finances in order amid this pandemic. We’ve listed down some money-saving tips to help you get through this crisis.

Evaluate changes in your expenses

The pandemic has brought significant changes to your work and lifestyle that surely affects your finances. Now’s the time to assess your new financial situation—what exactly changed about it, what can be improved, and where opportunities to save more may come in. Here are the big ones that may affect your cash flow:
On essential expenses – before the crisis, essential expenses might have been 40% of your monthly income.
Since most people are in a WFH set-up, transportation costs are lower but electricity costs at home may certainly increase.
People are forced to skip dine-ins and to switch to home cooking instead so yes, food expenses may also be lower.

When managed strategically, these changes in your essential expenses can help you boost your monthly savings by at least 10%.
On discretionary expenses – before the crisis you might have spent 20% of your income on going out, entertainment, restaurant meals, etc. With the restrictions to leave your homes, you can get significant savings of at least 10% of your monthly income. Have a look at your previous bank statements and estimate how much money you are saving on a monthly basis on things that you no longer buy due to the crisis.

Cash flows can negatively be affected if you are under no work-no pay scheme or due to employee retrenchment.

Reallocate your spending

If in any case your income has been negatively affected by this pandemic—either due to pay cuts or retrenchment—it’s time to revisit and see how you can reallocate your spending to make ends meet. Cutting costs can help in getting through this difficult financial situation less stressful. But before you can do that, let’s first look at how and where you spend your money.

Start with your fixed expenses—this includes the things you need to maintain a basic standard of living like housing, utilities, food, insurance and etc. Next is your secondary expenses or your discretionary spending. This may include shopping, entertainment, personal care, recreation, and etc.

You should be able to place each spending to its respective category and decide what can be eliminated to be able to sustain and balance your monthly income and expenses.

Commit to budgeting

There’s a lot you can’t control right now, but you can control your cash flow to free up some cash by cutting down expenses that you won’t be able to max out. Here are some items you can cut down on your expenses to help you live with your budget:
Online app subscriptions – you may not be spending a lot on physical services right now, but those digital ones can really eat up your funds over time. We’re not asking you to face home quarantine without Netflix to keep you busy but you can trim down on the ones you don’t use as often like Amazon Prime or Hulu—that gives the same entertainment as Netflix.
Gym/Club membership – since we’re forced to stay at home, it would be ideal to discontinue your memberships you won’t be able to maximize from home.
Review and downgrade your plans – have you checked your mobile phone plan recently? You might no longer need that much mobile data you’re getting since you’re at home 24/7 with a home wifi connection. Why not go for a lower deal to save some bucks?

Fees for these subscriptions may appear small but these can have a way of eating up your monthly budget that can be spent on more important stuff.

Take stock of what you have and don’t hoard

Since the pandemic started, empty grocery shelves have become normal as more and more people resort to panic buying and hoarding.

Before you step out of your house to shop and give in to the impulse of buying everything that comes into your head, make sure you’re able to check your pantry shelves to make an assessment first of your current supplies. Many of us already have well-stocked pantries that could help us survive for many weeks but others may not already have these supplies on hand.

You’d rather use what you already have and let someone who needs those goods today. Not only will your community thank you for not hoarding, but your wallet will be glad to not spend on things you won’t need, too!

Identify alternative revenue sources

Aside from cutting back on your expenses and finding out how you can strategically save more money, it’s also important to diversify your income. Relying on a single source of income can be a threat to your financial stability, especially if the crisis is preventing you from earning your usual income rate. In addition to building your skills and consolidating your knowledge, think about how you can leverage those skills to start a side hustle, monetize your expertise, and diversify your income sources. Besides, there are plenty of online job opportunities you can try and surely, you’ll find one that best fits your skill set.

The Takeaway

The world is on edge in fighting our COVID-19 situation, but it doesn’t necessarily mean that your finances need to significantly suffer. Cutting back on certain expenses altogether might not be an ideal solution for some, but it would help you to stay financially afloat during this crisis. It’s also important to be prepared for what’s to come, so take action to ensure your safety net is at hand before the virus impacts you in any way.

Post a Comment