Whether you've joined the ranks of remote workers or you're just spending more time at home these days, your financial situation probably looks different than it did at the start of 2020.
Fortunately, there are ways to survive the pandemic with your savings intact. Try these six tips from financial professionals to maintain a healthy savings account while your family is hunkered down at home.
1. Prioritize Energy Saving Strategies
According to a national Electric Power Research Institute survey, at least one in five households has experienced rising energy bills and other utility costs as a result of COVID-19. But with some small changes, you can keep utility spending down during the pandemic.
You can switch to a programmable thermostat, reduce the temperature of your water heater, or use low-flow products in your bathroom to see small cuts to your overall expenses," says Freya Kuka, personal finance expert and founder of Collecting Cents, a personal finance blog.
And if you're working from home, don't leave your laptop plugged in all day long, advises Holly Andrews, managing director of KIS Finance, a UK-based financial broker. Instead, charge devices when the battery runs low, and unplug them again when they're fully charged.
2. Make the Most of New Credit Card Rewards Categories
During the pandemic, some credit card companies increased rewards-earning potential in purchase categories like supermarkets, restaurants (including take-out), and cable. If your credit card focuses on travel benefits, it may have expanded its rewards categories to better serve your stay-at-home needs. Contact your credit card company to learn about current reward offerings, and allocate your spending to cards that will provide the maximum benefits.
If you are able to pay off your credit card each month and don't rack up any interest, paying for as much as possible with a good rewards credit card is a surefire way to increase your savings," affirms Jeff Rose, Certified Financial Planner professional and founder of Good Financial Cents, a personal finance blog. Look for a cash-back card with no annual fee that will earn you points that can be redeemed for cash or gift cards."
3. Protect Your Accounts Against COVID-19 Scams
Scams are rife at the moment, with fraudsters preying on people's anxieties and the uncertainty surrounding the pandemic," says Andrews.
But you can protect your assets with the proper vigilance, she says.
Check all your bank and credit card statements for fraudulent charges, create a different password for every account, and set up two-factor authentication to help prevent unauthorized logins. And never provide personal information or bank details over the phone or via email, cautions Andrews.
Check the Federal Trade Commission website to stay up-to-date on the latest COVID-19 scams.
4. Inspect Your Automotive Options
As a result of restricted travel during the pandemic, some car insurance companies are providing customers with an automatic monthly credit. If you haven't received a stay-at-home discount, call your provider and ask for one directly. You can also inquire about additional ways to save, such as bundling your home and car insurance or referring a friend, says Kuka.
If you live in a multiple-vehicle household, consider cutting out a car to save cash, she adds. This may be particularly feasible if you or your partner are now working from home. By walking, biking, or taking public transportation, you can save money on insurance, gas, maintenance, and more.
5. Shop Smarter
In this stay-at-home season, Rose recommends scrutinizing your budget and rethinking the way you shop.
If the 'spender' is the one who does the majority of the shopping, you may be able to save more than you think by assigning that task to the 'saver' in the family," he says.
With your family spending more time eating together at home, every dollar you can save at the supermarket counts.
Rose suggests you shop from the top and bottom shelves of the grocery store, as the pricier brands are often at eye level.
And by using cash-back apps such as Ibotta, Rakuten, or Wikibuy, you can earn back a percentage of the money you spend in person and online.
6. Claim (and Save) Every Refund
In a time of cancelled plans and restricted activities, Andrews recommends collecting all the money you're owed and using it to build your savings account.
If your event or travel plans have been cancelled because of COVID-19, contact the ticket seller, airline, or travel insurance provider to claim your refund. In addition, Andrews suggests canceling any memberships or subscriptions you're not currently using, such as gym memberships and premium TV sports packages.
The pandemic has meant that we're not going out as much, and therefore not spending money on days out, drinks at the pub, or gym memberships," she says. All of this money that you usually spend and have already budgeted for can now be saved into a rainy day fund or added to your long-term savings."
While the pandemic may have altered your financial situation, it is possible to survive this season with your savings intact. With a proactive approach, you can guard against uncertainty and take steps to achieve your financial goals.
