Post Covid Budgeting Tips | How to Save Money in Post Pandemic World
Budgeting | Lifestyleby Priyadarshini 16 May 2022
Even if your lifestyle hasn’t changed dramatically as a result of the pandemic, the state of the global economy has. In a post-COVID-19 world, here’s how to strengthen your financial decisions and resources. We tell you post-covid budgeting tips.
As society transitions from an endemic era to a post-COVID-19 environment, many people are attempting to reintegrate into normalcy. COVID-19 has clearly left an unwanted mark on all aspects of our existence. Energy price increases, supply constraints, and higher day-to-day expenses all threaten budget management and growth inside microcosms such as towns and families.
After all, the S$11 billion COVID-19 Resilience Package (Budget 2021) or the S$560 million Household Support Package (Budget 2022) can only do so much on a personal level before funds run out. Many teenagers and young adults who were affected by the epidemic are now adults. Suddenly, they are catapulted into adulthood, expected to manage major financial decisions and map out their whole life path.
Post-Covid Budgeting Tips
You can never save too much money
Singaporeans appear to be more positive about the future after a solid two years of pandemic-induced financial difficulties. Saving regularly is, unsurprisingly, one of the top priorities in financial wellbeing. Most people are acquainted with the 80/20 rule, which states that you should save 20% of your take-home pay and spend the remaining 80%.
Other variations further divide the 80% expenditure into categories such as essentials, wants, and debt repayment. Whatever your favourite saving mantra is, the baseline percentage for your savings should be between 10% and 20%. Any lower, and you risk jeopardizing your financial stability in the future. The more you are able to save above the recommended amount, the better.
Changes in spending habits
In a digital world driven by e-commerce and never-ending retail promotions, it’s all too tempting to fall down the rabbit hole of online purchase after purchase, especially when there’s a sale every month. This increase in disposable income is accompanied by an increase in spending pace.
What exactly do we mean by that? Our spending habits have reached an all-time high. Why? Because internet shopping provides us with both comfort and convenience – the comfort of purchasing while laying in our beds, and the convenience of having our purchases delivered to our door.
Avoiding credit card debt
One of the earliest signs of adulthood is the possession of a credit card. You suddenly have access to this fictitious sum every month that you are free to spend. Credit cards, on the other hand, are a two-edged sword. When you have too many cards, it’s easy to lose track of which card you’re using and forget to pay your bills on time. As a result, you’ll amass credit card debt, something you don’t desire because of the bank’s exorbitant interest rates.
Here’s how to better manage your credit dollars if you use credit cards for large, recurring costs like household bills and such.
Setting up an emergency fund – Post-Covid Budgeting Tips
Don’t undervalue the value of an emergency fund. In general, an emergency fund is defined as saving at least six months’ worth of income to enable you to get through an unexpected disaster.
However, because you never know what will happen in the future, it is highly recommended that you automate the process of saving for your emergency fund as well. That is, in addition to the 10% to 20% contribution to your savings, you should have already set aside a portion of your resources for an emergency fund. Given their nature, emergency funds should have a reasonable interest rate and high liquidity. The last thing you want is to have an emergency and realize you don’t have any liquid assets.
Choosing the Right Stocks
You should have more or less secured your emergency fund at this stage. That being stated, now is the time to go deeper into making your money work for you. Investing is a necessary skill to have in this day and age of global inflation. Yes, keeping your money in a high-interest bank account is beneficial, but it is insufficient to battle inflation.
That being said, you don’t have to be a full-time trader who spends every day on the stock exchange. Active stock and currency trading can be unpleasant and time-consuming, making it unsuitable for novices. For newcomers, passive investments (purchase and keep for the long term) and robo-advisors are a smart place to start.