Has COVID-19 helped us rethink our spending and saving habits?

When it comes to our finances, it can be easy to take a ‘set and forget it’ attitude towards money management. But, as we’ve experienced during this coronavirus environment, we just never know what is around the corner.

Depending on what situation you find yourself in, having savings set aside could make a world of difference.

Due to recent social distancing and self isolation measures, many Australians have stayed at home these past couple of months, and found themselves not spending money on regular social activities. Whether it’s weekly work drinks, weekend concerts, dining out and the list goes on.  

With restrictions starting to ease, it begs the question -  how can you continue along the trend of spending less and get ahead on your financial goals? Our handy saving tool can help you work that out.

Our savings calculator can show you exactly how much more you could be putting away through lifestyle changes; some of which have been forced upon us during self-isolation. Skipping Friday drinks could save you $1,560 per year. And cancelling that weekly gym membership that you’re not using (and replacing it with exercise at the local park)? More than $1,000 saved annually. With international travel off the cards for the foreseeable future, holidaying in Australia has never looked so good, with the potential to save you thousands.

It’s hard to save more money if you don’t know where your cash is going in the first place And money spent on little, seemingly insignificant things, can really add up over the longer term. 

Here are some tips which can help:

A monthly budget

A good starting point is to draw up a monthly budget. You should begin by finding out how much money you have coming in, such as your salary, your partner’s salary, income from shares and investments, and any benefits.

This will help you know exactly how much you have to work with each month.

List it out

Next, you should make a list of your expenses including regular payments such as credit card repayments, mortgage repayments, groceries, insurance and utility bills. Don’t forget about other costs such as entertainment and hobbies – these may not be the same each month so use a ballpark figure.

You should add the total amount of your expenses and compare it with your earnings, and you will get a clear picture of your spending habits. You may find that you have money left over after each pay cycle so rather than leaving it idle, you could put it in a high-interest savings account, an offset account or consider investing. On the other hand, you may discover that there are certain areas that you could potentially cut back on, such as unused gym memberships and subscription costs.

Shop around

Take the opportunity to shop around for better deals as this will result in more savings for you. If you have a home loan, consider refinancing to a lender with a sharper rate. If you have insurance, make sure you are paying for what you need or switch to a more affordable alternative. By knowing where your money is going each month, you will be able to plan ahead for expenses and save more.

Expert advice adds up

While recent restrictions have seen many Australians spend less money than usual in certain areas, it’s also been a time to take a step back, reevaluate spending habits and consider saving goals for the future.

Even with the best intentions, staying on track with savings goals can sometimes be tricky - we get it. Which is why at FinChoice, we can help guide you on your financial journey. Our expert advisers can work with you to set your savings goals, review how you've structured your bank accounts, and come up with a tailor-made plan to kick some savings goals.

To find out more, give your local FinChoice adviser a call today.