1. Develop Additional Income Streams
Most adults have formal full or part-time employment. Many also have additional passive or alternative incomes as well. This additional income is a boon generally but especially during tough economic times. As long as you have a computer and reliable internet access, there are likely opportunities for you to take advantage of new ways to acquire passive income. This can help relieve some of your financial stress by ensuring you have some money that isn’t tied to your formal employment.
Upfront time investment is necessary for passive income streams, but they can pay dividends later as your internet presence grows. Passive income can include creating blogs and videos that could generate ad revenue based upon views and engagement over time. Other passive income opportunities also include interest on savings accounts, GIC’s, TFSA’s, investments like stocks and bonds, RRSP’s.
Side work can also take a while to develop, but if you have a hobby that you can monetize, it can help you build your skills and maybe help pay bills at the same time.
With these in mind, remember that earning additional income on top of your present wages will attach income tax at your highest marginal rate. This could be a rate of taxation anywhere from 35 to 50% depending on your highest tax bracket.
2. Eat Out Less
If you frequently eat out, you know how much this can wreak havoc on your wallet. In comparison, a home-cooked meal will cost you an average of a couple of dollars versus the restaurant equivalent.
Aside from the meal, you will also need to take into account travel expenses to get to the restaurant, pay for parking, and any drinks and alcohol you may also have with your meal.
Phone-in meals are costly too but sometimes a necessity for a short period (Covid-19).
3. Fuel-Friendly Vehicles, Carpooling, & Public Transport
Owning a vehicle, outside of a home purchase, is a costly venture. Not only is the purchase itself pricey, but it is also a recurring cost, as it requires maintenance, insurance and fuel regardless of the type of vehicle you purchase.
Always consider used vehicles as a purchase choice first. This is not just recycle-wise and cost effective but because the lower price accounts for the previous owner’s loss through the depreciation of a new car.
Carpooling may also be a great way to include friends and family to be more money-conscious. If you have co-workers or friends around you that work close by, using one vehicle to get everyone to work and home will save each passenger a significant amount of cash. Just attend to Covid-19 requirements.
Public transport is another viable method of reducing the stress of owning a car, while also reducing your carbon footprint. Public transport in most cities also means the convenience of getting to central downtown hubs without having to worry about parking or traffic jams and the exorbitant cost of parking, generally.
4. Manage Utilities & Services
When it comes to utilities, many of us have a “set it and forget it” mentality that can leach into our finances.
Ask yourself these questions:
1. Can I take a hot shower that lasts 5 minutes less?
2. Does the heat need to be so high, or can I reduce the heat and wear long sleeves?
3. Do I need an ultra-high-speed internet connection if all I’m using is Microsoft Word?
4. Am I leaving the lights on too long? Will timers help?
5. Do my children really need to have the high end phones let alone enriched monthly plans?
6. Can I cut cable TV altogether and go antenna with minimal channels, or, cut some of my cable choices to decrease my monthly bill?
There are a variety of different combinations you can use to cut back utility expenses. Being aware of where most of your money is going will give you the knowledge to make some practical habit changes. Next time your utility or service bill comes in the mail, take the time to see where you can adjust your spending.
5. Cut Ties to Your Credit Card
Most people have credit cards. However, there are risks whenever we rely on them too much, especially with debt and overdue payments. Because a credit card is so easy to use, we can become almost unaware of how much we use our card until there is a big surprise when the monthly bill comes in.
You can keep track of all your credit card purchases by using banking or tracking apps on your phone, or just by writing them down or keeping all receipts. Tracking your credit purchases can help you visualize your spending habits and adjust them.
6. Backup Supplies & Funds
Backing up supplies and funds does not mean going out and buying all the toilet paper at your local store when the price is low. But it does mean having an adequate amount of backup toiletries, food, and general house supplies in case of a big financial hit or social disruption experienced with Covid-19. Having backup supplies and funds can also mean having an emergency reserve of money that you can tap into if your finances end up in a dire situation. Having a safety net of reserve money can lessen the burden on you and your family, and keeping this reserve replenished will go a long way in a pinch.
Implement Worthwhile Changes Today
Getting sold financial advice, cutting discretionary spending, being frugal, and analyzing one’s finances is something everyone should be doing from time to time. The ebb and flow of the economy can sometimes be hard to predict, so keeping one step ahead of the curve is recommended in case of a tough personal financial situation, whether it stems from the market, work or social unrest.
Making some lifestyle changes may help relieve financial setbacks but don’t be afraid to seek assistance if your monetary situation is under water. Reach out for formal debt solutions to help you and your family recover.