We entered 2021 hopeful, but cautious. Hopeful because there’s a vaccine on the way, and things were slowly starting to feel normal again. Cautious because if there’s anything we learned from last year (other than just how important mental health and hygiene are), it’s to always expect the unexpected.
We were given less than two weeks to revel in the glow of a new year before going back into lockdown. Businesses were barely surviving, unemployment rates were rising, and mentally, everyone was trying to “hang in there”. Now here we are, two weeks later and a week closer to another month. As relieving as pay day is, it has recently left some of us wondering if it may be our last, or the beginning of pay cuts.
If you haven’t already, it’s time to start keeping track of your finances, and prepare for any uncertainties. Taking charge of your expenses can seem intimidating at first, but it will allow you to adjust your spending habits for reduced incomes, and plan out your savings in case of an emergency. Here’s how you can start tracking your finances to cope with the current climate:
- Organize your finances
First and foremost, you’ve got to face the ugly truth. Gah! Head to your bank account and download your most recent bank statements. Start by separating your expenses into two categories: Fixed Costs (Needs) and Variable Costs (Wants). Your fixed costs are essential recurring costs, such as rent, car loans, phone bills, groceries – these are all necessities. Variable costs are those you can do without, like eating out, buying clothes, subscriptions and memberships.
- Develop a budget
Now that you know how much your fixed expenses are, you can calculate how much you’re able to save, and spend on variable expenses. Divide the spendable amount by weeks, or days, to give you a better understanding of how much to spend. We recently found out that a majority of our followers don’t have a budget because they don’t believe they have enough money – it’s not about having excess cash, it’s about tracking your finances and making sure you spend within your means. You can learn more about budgeting from HeyAlfred, a personal finance app, here.
- Create a table
Get into the habit of tracking your finances daily – it makes it easier for you to remember what you’ve spent on. A spreadsheet will allow you to see how much money you have left to spend, and help you decide which variable costs to reduce or eliminate. You can follow our example below:
Email us at contact@wildginger.my for the editable and automatically-calculated template!
The COVID-19 crisis has caused an economic downturn with businesses being forced to either shut down or implement cost cutting measures that include pay cuts and layoffs. This has many employees living with the fear and anxiety of losing their jobs.
By creating an emergency fund, you’ll be able to financially prepare for any emergencies, such as unemployment, with a safety net to fall back on. Emergency funds can keep you covered during a time of need without having to depend on credit cards or high-interest loans. If you already have debt, this can help prevent you from accumulating more.
Ideally, an emergency fund should cover 6 months of your expenses, but during pressings times like these – here’s how you can start saving right away:
1. Calculate your expenses
It’s important to know where your money is going rather than wondering where every time you check your bank balance. Go through your recent account statements and create a spreadsheet that shows your daily, weekly and monthly expenses. This will help you understand your financial situation better.
2. See what you can cut out
As we’re not encouraged to eat out and saving travel costs by working from home – put aside what you would usually spend instead of using it to shop online (we know how tempting it is!). Find and cancel any unused paid subscriptions, as well as review your current plans, such as cellphone and insurance, to see if there’s a more cost-effective alternative.
3. Create a savings account
It’s easier to see, and not touch, your savings when it’s kept separately from what you spend. Open a savings account at the same bank or one that has a higher interest rate – it needs to be accessible in case of an emergency.
4. Set a savings goal
Moving forward, set a target for you to save daily, weekly and monthly to get into the habit of saving regularly. You’ll be able to see that even saving RM5 a day can amount to almost RM2,000 at the end of the year! This makes it more encouraging and easier to do.
It’s become more essential to start an emergency fund for both your financial stability and peace of mind. All you need are the right goals and a realistic plan to match!
Payday reminds us that it was worth it – waking up early, dealing with clients, rushing to meet deadlines, getting stuck in rush hour traffic. It has us wanting to celebrate our hard work with an extravagant night out or escape the stress with a relaxing getaway.
There’s nothing wrong with the occasional splurge and enjoying an indulgence that costs more than we’re used to, but when it happens too often – it can be harmful for our financial health. Especially during a global pandemic, financial planning has become crucial to our wellbeing. It requires us to be more mindful of our spending to support our financial goals.
Like we’ve mentioned before, self-care doesn’t only mean adding expensive cosmetics to your cart or booking a massage at a 5-star hotel – you can get the same satisfaction from simpler things like cooking with your partner or going for a hike with your friends. There are many ways to treat yourself after a long month of work, here are a few that won’t bust your budget:
Shopping
Instead of buying new clothes, put on an episode of Tidying Up With Marie Kondo and get inspired to clean out your closet. Find joy in decluttering the rest of your home – donating or recycling the items you’ve chosen to part with it. You’ll feel satisfied and fulfilled, and have a serene space to unwind in.
2. Beach Holiday
With the amount of beautiful islands we have in Malaysia, it is tempting to take a trip out to paradise – but with the rising cases of coronavirus (and this unpleasant weather), it might be better to put plane rides on pause and dedicate a day to unplug and go outdoors. Catch some rays down by the pool or go hiking with your friends, you can get in touch with nature closer to home.
3. Gym Membership
Working out is an important part of self-care, but there are more affordable alternatives if you’re worried about breaking the bank. Get your heart rate up by going for a run around the neighbourhood or following one of the many free workout videos available online. Dancing in your bedroom also counts!
4. Date Night
We always want to spoil our loved ones, but it’s the most simple moments that often become priceless memories. Switch it up by cooking your partner a romantic meal or having them join you in the kitchen as a sous-chef. If you want a change of scenery, pack a lunch basket and head out for a picnic where you two can get some fresh air together.
Learn more about financial wellness here.
