Key Takeaways
- COVID-19 has changed numerous things in our daily lives.
- One of the biggest changes is the way many people are spending and saving their money.
- If you’re looking to make the most of your money habits, consider these five powerful money pivots.
During the current COVID-19 pandemic, there’s been a huge uptick in how much money people are saving – from around 7 or 8% to more than 20% over a three-month period. That’s amazing! Many people have really pivoted in their spending and saving habits.
If you’re looking to do the same, there are five powerful money pivots you can implement to really make the most of the situation. These pivots will help you along and build upon any additional savings you may find yourself putting away these days.
Number one: build good credit. One of the most important elements of building good credit is to make sure you pay all your bills on time. You may be saving more money because you’re working from home, not going on vacation, cooking at home, and so forth. By having fewer bills and expenses, you can get on track, pay off balances, and build your credit as you make your payments on time.
Number two: review your expenses. You might be surprised by the number of services you’re paying for. Those $3/month, $9.95/month, and $29.99/month services really add up. Chances are, you rarely use them, or you may have forgotten about them completely and never use them! Review what you’re automatically paying every month, clean up what you don’t use, and you’ll find yourself saving quite a bit.
Number three: renting versus buying. When this topic comes up, the first thing that comes to mind is usually housing. However, it can apply to a number of things. You can rent tools, formal clothes, and even solar panels for your home. There are times where it makes financial sense to rent, especially if it’s an item you’re not going to use very often.
Number four: used versus new. You can find big savings if you buy something used versus new. People are exercising more these days. As a result, exercise equipment is in high demand, making items such as free weights difficult to find in stores or even online. Not only might you have better luck finding these items used, but you’ll save quite a bit over buying new. Of course, cars are another area where you can realize big savings by buying used versus new. It really applies to so many things!
Number five: tax leverage. With 401(k)s, you have a tax deductible option or there’s the tax deferred Roth 401(k). You may want to move over to the tax deductible option to get more money back and realize a bigger savings.
These five powerful pivots are things you can do right now to create something positive out of the current COVID-19 situation. Implement them and you’ll find your money situation will be stronger and that you’re more successful in how you handle your money, building great habits that will be with you for a lifetime. Until next time, enjoy.