The coronavirus pandemic has made it important now more than ever to start saving money. If you want to hop on the financial awareness bandwagon, there are many things you can do to take charge.
A self-proclaimed millennial money expert and accredited financial counselor, Jessica Moorhouse, has aimed at clearing some uncertainties for millennials during these unprecedented times.
Follow Moorhouse’s tips to get through the pandemic without falling into extreme debt.
1. What should millennials be doing at this time?
First off, Moorhouse outlines that everyone has been affected by the pandemic in different ways, so there’s no one-size-fits-all answer to this. Some people incurred job losses and financial strains, others made more money than they ever thought possible.
If you’re beating yourself over your financial situation, give yourself a break because the world is in economic collapse, and nothing is in your control right now.
At this time, says Moorhouse, you need to focus on yourself and the actions necessary to keep yourself afloat. What seems most essential to you- clearing a debt, earning some more, or putting some money into your savings account?
With the pandemic came a wake-up call for people who lived paycheck to paycheck before, without paying the least attention to their financial health and security. Now, more people can focus on getting educated and staying on top of their finances- and with that comes the importance of budgeting.
2. Why is budgeting important?
According to Moorhouse, budgeting is simply about determining how much you earn and how you want to spend that money. It’s a form of keeping yourself accountable, and not freely throwing away your hard-earned money chasing impulses.
Initially, this might seem difficult, and consulting your budget repeatedly might seem like a hassle. However, once you get the hang of it and realize how effective it can be, you’ll never go another month without budgeting.
3. How do you create a budget?
Starting off, all you’d require is an app, a spreadsheet, or even a notebook would do. The first step, hence, is to figure out your gross and net income- basically, what the amount you are entitled to before and after-tax deductions.
Next, you divide your net income by redirecting a percentage of it towards investments or savings options, while the remainder you spend on your needs and wants. You can look up various budgeting tactics to help you sort out the percentage for each.
A healthy tip from Moorhouse is to save before you spend. Otherwise, you’ll find yourself taking money out from the savings pile, promising to fill the gap the following week. And we all know, that’s never going to happen.