Five simple steps to take charge of your financial well-being in a post-Covid world
During the past year, we all faced challenges, uncertainties, and unexpected expenses. So as we re-emerge post-vaccine and the economy picks up, we’ll need some extra inspiration to ease back into healthy financial habits for a better future.
No matter your current situation, it can be easier than you think to achieve greater financial stability. The key is to have a plan in place for your finances, be open to making small but meaningful adjustments, and stay committed to reaching your short- and long-term personal finance goals.
Below, you’ll find five simple and effective steps you can take, starting today, to improve your financial picture. You don’t have to take every step at once, so long as you start with a few changes and stick to them. By becoming much more strategic about your spending, and potentially increasing your income, you can work towards financial wellness and greater peace of mind.
Automate your savings
Whether you’re building an emergency fund or you’re saving up for a (well deserved!) post-pandemic trip, the easiest way to grow that nest egg is to automate the process as much as possible, so that you don’t even have time to miss that extra bit of money.
To automate your savings process, you could arrange with your bank to transfer a set amount of money from your chequing account to a savings account each month, or once every paycheck. Not sure how much to put away each month? Your monthly budget should offer a helpful starting point in terms of how much money you can afford to put aside for long-term savings.
Having regular, automatic fund transfers scheduled, even if it’s a small amount each time, can help you reach your goals that much faster. And this way, saving for the future can be a simple priority, not a stressful afterthought.
Trim monthly costs
Closely review your bills and spending habits. Are there any budget areas that you can easily trim or eliminate? If you can reduce your monthly spending by $100, then you’ve managed to find an extra $1,200 a year that could be used to pay down debt or grow your rainy-day fund.
Start by looking at your everyday fixed expenses like utilities, car or renter’s insurance, and any pricey membership fees or subscriptions. Can you save some money by renegotiating contracts, downgrading your plan, or switching to a new internet service provider? You’ll be surprised at how many companies will offer discounts, but only if you ask.
Another way to quickly trim costs is to lower your grocery bill. Canadians can expect to see food price increases across the board this year, but you can still reduce your overall food costs by eating meat less frequently, buying household staples in bulk when they’re on sale, and avoiding meal kits and other prepared foods at the supermarket. They’re convenient, but they’re usually more expensive per serving than cooking from scratch.
Find a great side hustle
One tried-and-true way to improve your financial wellness is to increase your income, and use those extra funds for things like debt repayment and unexpected home repairs. Even before the pandemic, the Bank of Canada found that about 30 percent of Canadians were doing some form of gig work. And it’s not just about making extra money, although that’s a given—your side gig can also be a great opportunity to pursue a passion project or gain new skills.
Having a side hustle that you feel passionate about is the key to staying motivated. Try to find a gig or project that aligns with your personal interests, and that you’ll enjoy doing even during your off-hours. That could mean doing part-time social media work, selling handmade crafts online, or even walking dogs in your neighbourhood. The possibilities are endless.
Practice frugal living
Adopting some “frugal living” habits long-term can help you achieve and maintain financial wellness by curbing spending and creating more wiggle room in your budget for unexpected expenses. To start, you could try embracing a more minimalist shopping philosophy, actively avoiding unnecessary or impulse purchases, and taking the time to price-match items when you’re shopping in store and online.
You’ll also want to avoid the temptation of lifestyle inflation, which can happen as your income rises. Instead of spending more because you can suddenly afford it, put that extra money to work for your big-picture goals like retirement or a down payment for a house. (Automating your savings can help with that!)
Embrace low-cost hobbies
As we continue to spend lots of time at home, hobbies can help keep us entertained. In fact, trendy pandemic hobbies have included bread baking, maple syrup making, and even mushroom growing. And research has shown that having enjoyable hobbies can be good for your health, and could even lead to improved productivity at work.
But if you’re on a budget, consider focusing your creative energy on low-cost hobbies that create rather than consume. For example, growing a beautiful flower or vegetable garden or baking sourdough bread at home involve time and effort, but you don’t have to spend money beyond a few initial purchases.