The looming economic downturn has left many people feeling anxious about their finances. Prices for everything from petrol to groceries have increased, while wages have remained static. If you’re worried about how you’ll make ends meet, here are some tips on how to save money during a recession.
Review your expenses and cut costs where possible
Take a close look at your budget and see where you can reduce your spending. There is no need to cut out all discretionary spending, but eliminating unnecessary expenses can free up funds to help you weather the economic downturn.
Review your expenses and cut costs where possible
During tough economic times, it is important to live within your means. This may mean making some lifestyle changes, such as eating out less or downsizing your home. But living within your means will help you stay afloat financially and avoid debt.
Save money where you can
Putting away a little bit of money each month can help you build up a nest egg to fall back on during tough times. Look for ways to cut costs so you can put more money into savings. For example, cook at home rather than eating out, and shop at discount stores or online instead of purchasing name-brand items. Make sure you automate the savings process via debit order, so you don’t have to rely on your own willpower!
Make a written plan
If you’re worried about how you’ll make ends meet during an economic downturn, it’s important to have a plan. Sit down and map out your expenses and income so you know where your money is going. This will help you identify areas where you can cut costs and make adjustments to your budget. You’ll also feel a lot better seeing for yourself that there is a logical way forward and you can come out the other side. Speaking of which…
Stay positive!
It’s important to stay positive during tough economic times. Remember that an economic downturn is only temporary and things will eventually improve. Focus on the things you can control, such as your own spending and saving habits, and don’t let the turmoil of the economy get you down.
Look for ways to increase your income
If your income has taken a hit during the recession, look for ways to bring in additional funds. Look for some part-time or freelance work online to earn extra money. You could also sell items you no longer need, such as clothes, furniture, or electronics. If you are not currently working, look for any internships or learnerships that might get you back into the job market.
Review your subscriptions
These days, when subscription services are all the rage, it’s easy to fall into the trap of paying for things you don’t use. If your gym membership is going unused or you never watch the channels included in your TV / streaming package, it may be time to cancel those subscriptions and save yourself some money.
Use the ‘snowball’ method to get out of debt faster
When times are tough, the last thing you want to worry about is debt. If you’re struggling to make ends meet, it may seem impossible to get out of, but there is hope! The debt snowball method can help you pay off your debts one by one, starting with the smallest balance.
Start by making a list of all your debts, from smallest to largest balance. Then, focus on paying off the debt with the smallest balance first. Make the minimum payments on all your other debts. As you pay off each debt, you’ll have more money available to put towards the next debt, and so on. This method can help you stay motivated to pay off your debts and get out of the red sooner than you thought possible. You can also investigate debt consolidation if you need more help with managing your payments.
Be mindful of your energy consumption
You can save a fair bit of money on your utility bills by being mindful of your energy consumption. Turn off lights when you leave a room and unplug electronics that are not in use. In the winter, dress warmly indoors to avoid turning heaters on, and in the summer, take advantage of natural ventilation by opening windows and using fans instead of air conditioning.
ALSO READ: Saving will give you confidence in making smart life decisions
Buy in bulk
Purchasing items in bulk can help you save money, especially if you buy from a discount store or online. When buying non-perishable items like toilet paper, paper towels, and laundry detergent, it’s cheaper to buy in bulk. You can also save on perishable items by cooking in bulk and freezing individual portions for later. You could even team up with friends, family, or your housemates to split the cost of bulk purchases.
Bargain shop
You don’t have to pay full price for everything. Take advantage of sales and discounts, and learn how to bargain shop effectively. (Just be wary of talking yourself into buying something you don’t actually need just because it’s special!) Many stores offer loyalty cards that give you access to exclusive deals, so be sure to take advantage of these savings opportunities.
By following these tips, you can weather the economic downturn and come out ahead financially. By being mindful of your spending and saving habits, you can make it through tough times without breaking the bank, as well as setting yourself up with good financial habits for the future.
and then