It’s not just the governments and businesses who should make some adjustments, we, individuals, should also adapt. We have to make drastic changes to conform to the new normal, and these include our finances.
This pandemic has affected not just our way of life but also our livelihood. Businesses, large or small, have been severely impacted because of the lockdown. Thousands ended up with no work and no pay scheme.
Just a month after the lockdown, companies have started to cut salaries, lay off employees, and some have unfortunately closed. I’m one of those whose pay has been reduced and is anxious about the uncertainly that lies ahead.
Today’s situation had reminded me of a maxim that was thought to me when I was an accounting student in the university. “Maximize profit and minimize expenses.” This is what businesses usually follow, and can be applied to our individual finances. If you have a salary cut, then slash some unnecessary spendings and look for an extra income source.
Save More (Minimize Expenses)
Money saved is money earned. Now, more than ever is the right time to save. The quarantine, in a way, has forced people to save. There are no more impulse buying in the malls, no dining out, no entertainment/recreational activities, and a good saving in gas and transportation expenses.
Although we have seen a significant decrease in spending of individuals, we can still do more to save. Start by cutting non-essential expenses. Prioritize needs in order of importance: food, health, and shelter come first.
Budgeting is really an essential thing to do. Revisit your monthly budget and do some budget cuts. Audit expenses to see where you can chop big items or prevent small items – like deliveries – adding up. Focus on what gives you value and what is essential. Trim down your expenses and add more to your savings. Today, we are navigating in unchartered territories.
Water. If possible, use recycled water for your plants and to flush your toilet. When washing dishes, use a basin rather than keeping the water running. Use a glass when brushing your teeth.
Electricity. Turn off the lights and other electrical devices whenever not used. In electricity, every minute is consumption. Harness the free resources from nature. Open your blinds/curtains to get natural light. Unplug appliances if not in use. Use air-conditioning only when the temperature is unbearable.
Rent. Check with your landlord for a possible rental cuts or delay in payment. Some real estate companies here in Dubai are already extending rental reduction. Now is an excellent time to negotiate everything.
Food. Cook at home rather than ordering from outside, especially if you’re a family. Make use of the time in isolation. There is nothing healthier than home-cooked food, aside from the fact that you are sure of the safety and cleanliness of the food you are consuming. Don’t throw away food. You can keep them for later consumption. Don’t let fruits and vegetables rot or spoil.
Clothes. If you are working from home, then there is no need to buy new clothes. Just wear that a pajama set, and you can still be as productive when you’re dressed-up.
Cancel Subscriptions/Memberships: In April, I have used only 5% of my mobile data as I have WiFi at home. When you are not using the service of something that you are paying for, then why not terminate to get a good saving. Cancel Netflix subscription if you find it not essential for survival. Gym membership, nowadays, is of no use because gyms are closed and might not open anytime soon. Remember, every cent counts.
Buy in Promotions. Buy groceries and supplies on promotions. In Dubai, you can get a good saving during weekends in Carrefour or and some other major supermarkets. You can buy in bulk to get a good deal. Viva and Baquer supermarkets both offer low prices in many grocery items.
In General. It could be worth downsizing lifestyle costs: for example, cheaper schools and a smaller place if your contract is ending soon. Now is an excellent time to negotiate everything.
Earn More (Maximize Earnings)
After trimming down your expenses, focus on what you can do after this is over. Once the economy bounces back, we need to be creative in keeping costs low and generating more income for the family. Work on a new idea to solve the current financial struggle by engaging in activities that give you extra cash.
Sell Products. The internet is a very useful tool in commerce nowadays. You can start selling products to your friends on Facebook. If you have a talent for artworks, then you can sell some handmade products like this other featured article: Earn from Personalised Artworks & Crafts.
Offer Services. If you know carpentry and electrical works, then you can offer your services to friends and neighbors. Any specific skill you possess can be used in some freelancing jobs online.
Sell Unwanted Items. Items that are of no use to you could be valuable to others. You can earn for its salvage value. Begin a garage sale in your front yard or online.
Utilize Idle Resources. If you have a spare room, you can accept some boarders. You may convert the front part of your house into a commercial space. If you have any idle land, then you may start investing in farming: Backyard Goat Farming and Starting a Coconut Farm Business?
Other Important Tips
Loans / Credit Card Debts. Get in touch with your banks/lending agencies for re-structuring options. Some banks in the UAE have introduced free-of-charge repayment holidays for up to three months; interest-free and processing fee-free credit card installment plans of up to six months. Or you can speak to the person whom you owed to give you more time to pay.
Invest in Yourself. Learn a new trade or skill. After this pandemic, the competition in the job market can be tough. The more skills you have, the more chances of landing in a better job. Take online classes to prepare for the job requirements in the new normal. There are many free online courses. Some premium courses may collect a minimal fee. Free online courses are available in TESDA.
Prepare for a Plan B. Let’s hope for the best but prepare for the worst. Stockpile cash. Now is not the time to invest in an off-plan property or start day-trading stocks. Plan financially for losing your job, so you are prepared if the worst happens. But if a job loss or collapse of your small business befell upon you, then you should be implementing the Plan B now.
Start Your Own Business. Harness your full potential. So many successful businesses start during tough times. In every threat, there is an opportunity. Somehow, somewhere there is a problem that requires a solution, a need that has to be satisfied. With a gifted entrepreneurial eye, you can create a business from that need. I have another article that outlines 40 Business Opportunities Arising from COVID-19. Check that out, and maybe you will get the best fit for you.
Ask for Help. If, after exhausting all your resources and efforts, you’re still struggling financially, there is no harm to ask for help from relatives and friends. You can borrow money and pay or work for it later. If you are a carpenter, then you can fix some broken furniture as a form of payment.
Give Help. The only way that we are all going to get through this is if we think as “WE” not “ME.“ Let us help others in our little ways. If you are financially able, provide, or lend money to a relative or friend in need. Money is not the only way to help others. Give non-monetary support, advice, and expert opinion.
Pray. Prayer is the best weapon everyone possesses. Ask for grace, help, guidance and strength from Him.
EarnPeso holds no control over your financial fate. It is here as a guide. Exercise prudence in every investment or business you undertake, and success will follow.
I hope this article provides you essential information to improve your finances. Check Finance Tips for more insightful essays.
Do you have any questions? I would love to hear from you. Please leave a message in the comment box below or follow and message me on Facebook.