Pretty much all of our conversations these days open with a quick chat about the current situation with Covid. While it’s all a bit bleak at the moment with the latest surge in cases, hospital admissions and most unfortunately deaths, there is light at the end of the tunnel in the shape of the rollout of the vaccine starting to gather pace. This of course is the gamechanger for 2021.
So we’ve decided to keep our positive outlook to the fore and want to set out five simple tips in relation to your finances that will ensure you can enjoy life to the maximum when all of the restrictions ease, and we all get back to life as we knew it before.
What has this to do with your finances? Well particularly for all of you who are self-employed or running your own business, your health is crucial for your financial wellbeing. Short-term sick pay benefits will be a fraction of what you earn, if available at all to you. But apart from the impact on your immediate earnings, the future growth of your business will probably suffer too, as you rightly focus on your recovery and not your business.
If you are unable to work because of illness over the longer term, many of you have income protection in place – a very worthwhile cover that will go some way towards replacing your income. But of course a long term illness is never good news.
Take care of yourself, follow the guidelines and stay as healthy as possible to protect your income, today and in the future.
Plan a holiday
Do you remember them? When we all used to get on planes and go off to nice warm places? Those days will come again, hopefully later in 2021. So now is the time to start thinking about that longed for holiday. Get your whole family talking about it and thinking of where to go. Then get everyone working on it… and by this I mean saving for it. After all, one of the big pluses of our restricted lives over the last year has been the significantly increased levels of household saving. So give yourself an attractive saving goal.
Of course if holidays are not your thing, plan a big reward for later in the year that is something really meaningful to aim for.
Pay yourself first
So hopefully now you’re committed to saving. You’ve got a clear goal, that nice holiday later in the year. This can go any of 3 ways,
- You’re not in a position to save or you choose not to save. This makes the prospect of the holiday much more distant. How will you afford it at the time?
- You choose to save whatever is left over in your account at the end of each month. A bit better than no. 1 above, but not much better to be honest. Money left in your account seems to find a way to get spent.
- You save your chosen amount immediately after you are paid each month. And you then manage your spending to get through the month. Known as “paying yourself first”, this is the route to successful saving.
Review your spending
Have a look at all of your spending and identify any wastage or opportunities for savings. This could mean fewer takeaway dinners, re-negotiating your energy / telephone / TV subscriptions and shopping around for better deals. Any savings achieved will improve the quality of your holiday.
Monthly (online) shopping trips only
Do you remember back in the day when you used to go into town on a bit of a shopping trip? Maybe it happened a few times a year where you made multiple purchases. Now that we are all shopping online and it’s so easy, our habits have changed. We’re constantly and mindlessly browsing and then seeing stuff we like. And then it’s just so easy to buy it without thinking about it too much… and maybe end up regretting it a bit later.
The answer might be to go back to the old way of shopping. Decide how much you have to spend and then go shopping, just once a month. But now online. If you see something you like during the month, don’t buy it then, wait for your monthly shopping trip. This way, you’re likely to avoid or at least challenge your impulse purchasing behaviours.
All that’s left then is – where are you going on that great holiday?