Save Budgeting

The Best Small Savings Moves To Make During Coronavirus

Hayden Field  |  July 16, 2020

If you’re looking to bolster your savings during this time but are unsure where to start, we’ve got your back with small, actionable first steps.

Change may be “the only constant,” but amidst a global pandemic, life feels more uncertain than ever. For many, COVID-19 has affected mental and physical health, job security and personal relationships, not to mention financial stability. 

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In response to any type of unpredictability, the most widely-cited financial advice is to save more. It makes sense: Money may not buy you happiness, but in many cases, it can translate to freedom and peace of mind — and you can’t put a price on that. 

“To get people financially secure… they should try to get their emergency fund up to three to six months of cash,” says Carrie Schwab-Pomerantz, certified financial planner and personal finance expert with Charles Schwab. “Given what’s going on today, probably more depending on your unique situation.” 

But if your savings account balance is zero (or you don’t have a savings account at all), don’t panic — by starting to think about your goals, you’re already on the right track. 

“Give yourself credit for even having the wherewithal to want to save,” says Jamila Souffrant, founder of Journey to Launch and host of the corresponding podcast. “When it comes to finances, especially considering the environment and what’s happening, you have to be gentle and kind to yourself right now, and the fact that you even have a goal to save is a big deal.” 

If you’re looking to bolster your savings during this time but are unsure where to start, we’ve got your back with small, actionable first steps. Consider these the building blocks of your game plan. 

Take a look at where you stand financially 

One vital first step in propelling yourself towards savings? Taking stock of where you are now versus where you want to be. It’s about “understanding your outflow,” says Souffrant — taking a close look at both incoming and outgoing money. 

There are a whole host of apps that can help lay out what you spend, but if you use a combination of cash and cards, one of the best ways to get a complete look at your habits is using the old-fashioned pen-and-paper (or Notes app) method: Write down everything you spend for a month, then categorize the purchases into “essentials and non-essentials,” says Schwab-Pomerantz. She adds that it’s important to take a big-picture look at what you have (any assets you have that help you feel secure) versus what you owe (credit card debt, student loans, mortgage payments and the like). 

Decide on your goal 

Once you have a clear understanding of your current financial picture, you can make an informed decision about the best way to reach your goal and what that timeframe looks like. Keep in mind that breaking your big-picture goal down into smaller ones that you can check off along the way can help increase motivation: “It’s not about the amount — it’s about creating the habit,” says Souffrant. 

Consider factors like the amount you’ll need to save per month, how you may want to adjust your lifestyle and whether you’ll consider taking on additional work (like freelance, contract or gig opportunities) to boost earnings. And if you surround yourself with other people who are pursuing their own savings goals — via Facebook groups, social media accounts, podcast communities and the like — it could help inspire you and allow you to offer advice and support to others. 

Re-assign the money you’re not spending right now 

COVID-19 has impacted virtually everyone’s financial situation, but for some, quarantine has translated to major cutbacks in common spending areas like travel, transportation, dining out, fitness and shopping. If you’re in a place where you feel stable enough to put that money away, then it’s important to take those unused dollars and give them a job: “Assign that difference,” says Souffrant. 

For instance, if you typically spend a certain amount per month on gas, the subway or rideshare apps, earmark that money for savings, then — and this is key — set up an automatic monthly transfer in that amount to your savings account. The idea is that, by taking that money out of the equation, you’ll live on less (and experience the opposite of “lifestyle inflation”). 

“Don’t let COVID budgeting go to waste,” says Schwab-Pomerantz, who suggests taking “half of what you’re not spending right now” and supercharging your savings. 

Trim the fat on recurring expenses 

Take a look at your auto-renewing subscriptions (tools like Trim and Truebill can help flag them) and then cancel anything you’re not using regularly. For bills — everything from cable to car insurance — try your hand at negotiating for a lower rate. Even if you talk it down by a few dollars, that’s regular cash back in your pocket — with no future effort. And there’s seldom been a better time to ask for lower rates than during COVID-19. 

“Personally, I refinanced my mortgage… If you can save a half a point on your interest or maybe more, you could really save a lot on your monthly payments,” says Schwab-Pomerantz. “You’re not going to get anything if you don’t ask, so you’ve got to make those phone calls.” 

Something else to consider: Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, all federal student loan payments have been placed in forbearance through September 30, 2020. That means you don’t have to make a payment until October — but if you do continue to pay down your balance, 100 percent of your payment will go towards the principal (and you won’t be charged more in interest). It’s a prime way to make your money work for you. 


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