Tips for Managing your Money During Hard Times (COVID-19 Series)

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There are many things that influence or financial situation. But there are ways to take control. Even in the midst of a pandemic.

Check out the post below or the podcast episode above to get your questions answered about finances whether you have been furloughed or you are working from home and still receiving your salary.

Plus my guest shares simple tips to getting started with saving for a vacation so that you have make memories without breaking the bank.

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How much should I have in savings?

There’s a general rule that says that you should have at least $1000 in savings if you have no savings at all.

But if you’re living in a very high real estate area where your rent or mortgage is double that, that doesn’t work for you.

And that’s just one single payment. Instead of having a blanket rule, ask yourself, what are you paying for every month that you could cut out?

For instance, you could cut out eating out if you lost your job. Or the cable if you had to.

But you can’t cut out paying your electric bill and health insurance.

Calculate how much a month’s worth of necessary expenses you have. Then multiply that by three to six months.

Having three to six months saved is ideal.

But the pandemic has shown that even that may not be enough. You may want to have six to twelve months of living expenses.

Should my focus be on savings or paying off debt?

One thing that COVID-19 has taught us is that having money in the bank for savings for a completely unexpected situation is so important.

Because personal finance is personal, it depends on the individual and their current situation.

Generally, it’s recommended to continue paying the minimum debt payments, and any extra payments could go toward savings.

If you already have three to six months worth of saving in your account and you have a steady income, continue working on paying off debt.

What’s the best way to budget if you have a commission-based job?

It’s easy to think that your income is so variable that you can’t budget.

But you have to plan so that you know where your money is going and how you can free up money to reach your financial goals.

Start by taking the base amount that you expect to get paid and estimate low with that.

Then cut out anything extra from your budget that’s not essential.

So shopping, fast food, things like that. Then you see where that brings you.

Does that amount of pay cover your housing, transportation, food like you’re at home cooking food and your utilities?

And if not, then it’s time to cut more or hustle more.

If you’re experiencing a meager commission, there are several ways that you can make money now or have a side income to supplement things.

MLM

You could get started with an MLM (multi-level-marketing) company or direct sales business. Here are a few popular choices:

Etsy

If you are crafty, Etsy may be an option for you. You can sell your products (physical or digital) on Etsy.

You can sell anything from jewelry to wedding invitations to bath bombs.

VIPKID

VIPKID is a company where you can teach children in China English.

You don’t need any teaching materials or curriculum as the company provides you everything that you need to teach.

Freelancing

Freelancing allows you to have the flexibility to work when you want and where you want.

By being a freelancer you are self-employed and take on contract work from companies, organizations, or small businesses.

If you’re interested in freelancing, start with what your skillset and actually aligns with right now. For instance, If you enjoy doing a lot of writing, consider proofreading or copywriting.

Or maybe you love being on Instagram, consider doing social media marketing.

Is now a good time to invest?

It’s absolutely an excellent time to buy investments.

If you have 6 to 12 months of savings, set aside an emergency, and you don’t have any consumer debt, then investing is a good thing to consider.

So consumer debt is things like credit cards, student loans, car loans, home equity loans, etc.

Make sure that you connect with the front certified financial advisor somebody that can tell you precisely what you should be putting your money into at this point.

What about buying a car? The deals look so enticing

It’s so tempting to see those outstanding deals.

I’ve seen a car commercial that says you don’t have a make a payment for three months if you purchase a car now.

Before you go to the car dealership, ask yourself a few questions.

Were you planning on buying that big-ticket item this year before you saw the marketing for it?

Or is it something that you’re like “Oh, my gosh. This is a great time to buy.”

Here’s the thing. There’s always going to be another great time to buy something.

I know we’re in a little bit of a unique situation right now, but there will always be another sale.

There’s still gonna be another opportunity to buy something.

Then also think, do you truly have the money for it?

Because one thing that you don’t want is to be locked into payments that don’t allow you the flexibility to do the things you genuinely enjoy, like traveling and creating memorable experiences with your kids.

Another thing you can do is ask yourself how much of your life do you have to work to get that item right now?

And sometimes, that helps to put it back in perspective.

What if I’m in a good situation financially, what should I focus on?

What if I have been working from home and received a stimulus check. What are some things that I should consider when saving for a vacation?

Whenever you receive a bonus or some unexpected money, always start by asking yourself, how can I use this money to get more towards my goals?

Is your goal to pay down debt, save for a downpayment for a house, or buy a new car?

But also have some balance so that you don’t feel so restrictive with your money.

Take a portion and be responsible with the money. And take the other part and have fun.

What if I have been recently laid off. What are some things that I can do to pick up the pieces and move forward financially?

Being laid off is a difficult situation to be in.

Do everything that you can to get the unemployment going.

Because there are so many people that have been furloughed or terminated, there’s an influx of people filing for unemployment.

Next, make sure to contact your lenders for credit card companies and anywhere you have a reoccurring payment.

Ask if there’s any way to reduce or delay your payment. At this time, many lenders are giving various options.

Lastly, think about your skills, and how you can use them to start making money now until you can find another job.

Tips for saving for a vacation

First, start by opening a separate savings account.

If you can work with your employer to automatically have a portion of your paycheck, go to this account every month or pay period, so you don’t have to think about it.

It could $25 or $50 to get started. Whatever you feel comfortable.

It’s easier to have the money automatically deposited instead of using your own will power to put the money away every month.

This way, you won’t have to worry about being tempted to spend the money instead of putting it in a savings account.

To increase the savings, start making transfers to the savings account to supplement it.

If you don’t get your hair done, put the money in savings. If you hold off on eating out, put that money into savings.

Remember, you don’t have to keep up with anyone. Your personal financial goals are yours only.

Don’t feel pressured to keep or look a certain way. Do you.

Links mentioned in this episode

She Saves She Travels
Episode 17 with Kendall – Simple Tips for Paying Off Debt Quickly
She Saves She Travels on Facebook
She Saves She Travels on Instagram
She Saves She Travels on Pinterest
Coaching with Nikki

Timestamp
04:05 – Pay debt or save?
05:43 – How much to have in savings
07:10 – Budgeting if you have a commission-based job
09:23 – Should you invest now?
10:53 – Nikki’s’s thoughts on purchasing a car now
12:56 – If you are in the right place financially
14:29 – Saving for a vacation

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Check out the other episodes in the COVID-19 series.

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