Today we're here to discuss how to manage your finances now that lockdown is over and places to spend your money are opening up!
If you're located here in Ontario like us, then you'll probably know we have been out of our COVID-19 lockdown for about a month now (how exciting 😍). Patios are open, personal care services like hair and nail salons are open, and you can go shopping in-store at the mall and other big department stores. It really is great that we are moving through the phases and things are opening up; but with that being said, for some of us it may mean a lot more spending than we've been used to over the past year and a half. So today we are here to offer some tips and tricks to help you stay on track with managing your finances while still being able to enjoy post-lockdown life.
Everybody's wants and needs will look differently, so keep in mind that these are just tips that you can incorporate as needed!
Let's dive in!
Budget, Budget, Budget!
The best way to go out and enjoy the reopening, while staying on track with your financial goals, is to create a budget (if you don’t already have one). Here at Untangle Money we really recommend having a budget as it’s a great way to keep track of your income and expenses, stress less about your money, and plan for your future. And the best part about having a budget is that you can adjust it anytime you need.
Sisterly Advice: You can easily budget for things like dining out or miscellaneous shopping. At Untangle Money, we recommend knowing how much money of your budget goes to your fixed expenses; how much money you need for future you (for buying a home, retirement, etc.); and how much of your take-home money is leftover (we call this your flex spend or variable costs). You can look at this number by month, week, or day. As long as you can afford your essentials, you can allocate this money towards whatever makes you happy. If you want help finding these numbers, get our Mini and we can walk you through it.
Just remember, you don’t have to hit your limit - just because you’re under it, doesn’t mean you should spend until you hit it. Likewise, if for some reason you go over your limit, don’t be hard on yourself! Unexpected plans come up or things cost more than expected - that’s ok! You can always cut back in other spending areas or the next week or month if needed. Here at Untangle, we also recommend a Life Happens fund. So if unexpected plans or situations happen, you can take the money from that fund and just top it back up next month (for your Life Happens fund, we recommend saving up $2,500, this will cover your needs most of the time, and it’s a realistic place for most people to start).
Spend within your means.
Obviously everyone is just itching to get out of the house, we definitely are! With the sunny summer weather, how can you resist a patio drink or finally getting a fresh haircut? We’re not here to tell you not to treat yourself. Eating out, shopping, and personal care especially, are not bad things.
Building off of our budgeting tip above, when you do spend your money, it’s important to make sure you’re spending within your means. Your mindset should be to spend based on what you currently have in your bank account - not what you expect to have and definitely not more than you have. Just because you can put it on your credit card and pay it off later doesn’t mean you should!
Prioritize your spending.
If you haven’t already noticed an increase in your grocery bill, according to Canada’s Food Price Report 2021, they have forecasted a 3-5% increase in overall food prices (up to 6.5% specifically for meat and vegetables). So on top of spending more money because of the reopening, we’re also spending more money on groceries (👎🏻) - but you gotta eat! So, a great way to manage your finances with reopenings and rising prices is to prioritize them!
This will look different for everybody. But to start, make a list of what your financial priorities are or your spending priorities. Ideally your financial goals, fixed expenses (rent, car payments, utilities, subscriptions, etc.), debt payments, savings/investments, should all come first. Then think about your variable expenses like groceries* - because prices are going up, you may be spending more than usual in this category. In terms of dining out/ordering in or shopping expenses, are there specific events or non-negotiables that involve spending in these categories (like birthdays, anniversaries, work, vacation, etc.)?
Prioritizing your spending goes hand-in-hand with having a budget (refer to above). Once you make your budget and know what all of your fixed and variable expenses are for the month (or however you budget), you can organize and prioritize them. That way if you have unexpected plans that come up or just want to go out instead of cook (for example), you’ll be able to base your decisions off of your prioritized list. You may just have to cut back in one area to spend more in another!
We’re not saying you should say no to any plans that pop-up but your priorities should come first, especially if you are trying to cut back on spending, saving up, or whatever your financial goals may be. Remember, short term pains for long term gains!
*Here are a list of quick tips to help you save money on groceries:
Plan ahead, make a list and stick to it!
Eat before you go grocery shopping - don’t go on an empty stomach, you’re more likely to buy more!
Buy items that can be used for multiple meals or snacks - this will save you money and save on waste!
Look for items that are on sale or are the cheaper option (if you don’t like the cheaper option you can always switch back)
Don't let external validation dictate your spending habits!
A really important thing to remember is that just because things are open that haven’t been for awhile, doesn’t mean you need to go spend all your money at once! Patios and shopping will likely (hopefully) remain open so you’ll have plenty of time to check everything out. We know it can be hard to resist especially when you see your friends or even random people out enjoying the patios or malls. But, don’t let that influence you into overspending. Everyone’s financial situation looks different and what you see is not always the full story. Focus on your own financial situation and what your goals are and do what is best for you to keep working toward them.
Here are some other helpful blog posts we’ve written about how to manage your finances!
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At Untangle Money we help women understand their (real!) financial picture, and obtain financial guidance from people that actually, really, get it. We would love to help you, too. Join the community of hundreds of other women looking to strengthen their financial well-being. Get in touch here for a free consultation!