The coronavirus pandemic has not only affected health, but has also had a strong impact on personal finances. The crisis has forced thousands of people to adjust their expenses to adapt to the new reality that has been hit by layoffs, bankrupt companies or heavy health care expenses, among others. Therefore, to face this situation and be prepared for an uncertain future, society has awakened its need to save.
The current situation has rethought people’s consumption habits, who constantly face the dilemma between saving and spending.
At this time, it should be a priority to adjust the purchases that are made, identifying those that are really necessary. In this way, you can start creating a money cushion that will help solve problems in the face of unforeseen events. At this point, the following recommendations must be taken into account:
1. Before buying, compare prices
It is important to remember that the savings is part of a process of planning and organization. It is recommended to do an online search to find out what products and / or services can be found in the market, as well as their characteristics and prices.
Before buying , the price of a product should always be compared with another of the same or similar characteristics. If you are looking for a service that pays for a long time, such as medical or vehicle insurance, it is convenient to contact two or three different companies to choose the one that offers the best services at a reasonable cost.
2. Reduce ant expenses
Feeling that the money is going without knowing what is a very frequent idea. These are called ant expenses and they are small purchases that are not necessary and that are made frequently and almost unconsciously. They can be diverse, from buying a cookie or buying clothes on impulse, to hiring video or music streaming services that barely make use of them.
These small amounts of money can represent large amounts in the long run. To identify these expenses, you can carry out the exercise of noting each disbursement for a period of one month. In this way, it will be determined how the money is spent and actions can be taken to correct the excess of these consumption.
Remember that reducing small expenses can lead to big savings.
3. Create a weekly budget
A budget will help create a savings plan. The first step is to place personal income and expenses as fixed and variable expenses and the payment of debts in a certain period of time.
Once you have an idea of how much you spend month to month, you can begin to organize your expenses and thus define how much money you need to live. In addition, you will be able to identify some over payments and ant expenses, which could be eliminated and which could represent an amount to save.
4. Use financial products created to initiate savings
With a defined budget, it is important to establish short, medium or long term financial goals, which could be from studying, taking a dream trip or buying a home.
For this, it is recommended to consult with the financial institution of which you are a client about the products that can help you achieve the objective. It can be found from virtual piggy banks that generate interest according to the established time, such as ‘ My Goals’, from mobile banking, to investment alternatives such as term deposits or mutual funds. The various alternatives they offer should be reviewed to choose the one that is most convenient.
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