During a pandemic, the financial playing field changes. With our economy taking a hit with COVID-19 going on, saving money is a little more difficult. Managing good spending and saving habits can be more difficult since there are many that are unemployed and in bad standing.
Read below for information on better ways on how to save money during a crisis.
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Do’s to Consider
Below are some tips you should think about to adjust your savings habits:
Reduce Costs
Normally, it’s an obvious ting to save money and cut unnecessary purchases. However, during a pandemic, re-looking at what an “unnecessary cost” is can be helpful. You can begin by taking the price of basic necessities into consideration like: food, utilities, mortgage, and bills.
Fortunately, there are many financial institutes that are pitching in to help their communities during this troubling time. This way, it will ease the stress of paying multiple bills and loans when you’re not financially stable at the moment.
Adjust Your Savings Goals
It’s a good idea to reevaluate your goals to save money to fit with the current global situation. Typically, it’s good to set aside money for a rainy day and build up your savings as much as you can. However, since things have changed over the past several months, your goals might be a little different.
As your cash flow changes, the way you save must be altered to work with the new changes. Using automatic transfers from checking to savings accounts can be different for each person. If you’re not able to do this any longer, decrease the amount or cancel the transfer in general. Don’t fret, you don’t have to cancel these transfers forever.
Look for High Savings Rates
Consider opening a high-yield savings account with an online bank. Typically, this will earn you better savings rates compared to a cash management service. The national average is 0.06% at the moment. However, there are several online savings accounts that have more than a 1% APY Rate. Keep an eye out for these types off accounts so you can benefit from them.
Furthermore, when you open a high-yield savings account, you’ll be able to earn more and save money safely in the process.
Get Help From Your Community
If you’re not looking good financially, there’s no shame in asking for help every now and then, especially during a pandemic like this one. Just call 2-1-1 or go to the 211.org website to receive assistance from them. Additionally, this service is free and you’ll be ale to see different resources your community is offering at the moment.
Some resources communities are offering are: food, banks, meal services, shelters, mental health, etc. Furthermore, by using these resources in a time of need will really be beneficial for you. Plus, you won’t have to worry about being judged for getting help when you need it.
Don’t Do These Things
Below are some things you should not consider doing during a pandemic. As tempting as it may look, it will not help you financially at all.
Use Your Savings Without a Plan
Do not use your savings unless it’s an emergency. If you do use your emergency fund, you need to estimate a specific amount before you take the money out of your account. Additionally, you should keep track of how much your spending as well.
Furthermore, you will have to start saving up your money all over again to have something to fall back on. It can help if you settle for a minimum amount you need to keep in your savings account.
Withdrawing From Your Savings Too Much
Be sure that you keep track of how much you’re taking out of your savings account. Losing track of this can get pretty ugly for you. Additionally, banks will normally charge large withdrawal fees for your savings account as well. For example, if you go over 6 withdrawals a month, the fees will bring you down.
Thankfully, since COVID-19, the Federal Reserve has put a pause on this rule. However, it’s up to the bank you’re with that decides if they want to charge you a fee or not for withdrawing.
Conclusion
Overall, adjusting your savings habits to fit your current situation is always a good thing. No matter if it’s a worldwide crisis, or if you just want to put more money aside for a rainy day. Knowing how to save properly will definitely help you in the future.
However, if you fall behind on funds and are piled with fees and bills, pulling money from your account isn’t necessarily bad. Just be sure that you set a limit for yourself so you don’t withdraw too much from your account.
