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How To Use The Quarantine To Your Financial Advantage

How to use the quarantine to your financial advantage

If someone had told me a year ago that I would be staying at home for several months in 2020 and that schools, businesses, and travel worldwide would be closed, I probably wouldn’t have believed it. But here we see months of lockdowns that seem never to end.

Some states are slowly and partially opening shops and restaurants, but schools are largely closed and many people will continue to work from home for the foreseeable future.

It’s strange for sure, and we all know that the economic consequences have been devastating for many. However, it is possible that some of us will end up finding a much better, new “normal”.

9 ways to move forward during quarantine

Perhaps you can find a way to get rid of the things you didn’t like in your life before, or a way to use the savings from quarantine to your advantage.

If you’re looking for a silver lining in all of this clutter, you may need to look inward to find things to change in your life right now – while you have some time.

Here are 9 steps you need to take right away:

  1. Optimize your finances
  2. Organize yourself
  3. Refinance your debt
  4. Protect your identity and finances
  5. Establish a will
  6. Sell ​​your “things”
  7. Track your expenses
  8. Start using a budget
  9. Start a side hustle

1. Optimize your finances

Aside from using a budget, there are many other ways you can optimize your finances. Some of these steps can help you save money while others can simply help you make your life easier. If you want to streamline and manage your finances more easily, consider the following tips:

  • Get rid of subscriptions. When you have a ton of subscriptions that you no longer use or care about, quarantine is the perfect time to cut them out of your life. You can do this manually by checking your credit card bills for subscriptions you’ve forgotten and then calling in to cancel. However, you can also use an app like TrueBill or Trim to take care of you.
  • Open a new targeted savings account. Tired of your bank Take this time to open a new checking or savings account, many of which offer cash bonuses just to sign up and meet the minimum balance requirements. You could even open a targeted savings account for future trips, tuition, or some other destination.
  • Bundle insurance policies. If you have homeowner, tenant or auto insurance with different companies, you can usually save money by bundling your policies with a single provider. Take the time to research auto insurance and other policies, then consolidate with the provider that offers the best deal.

2. Organize financially

It can be easy to get a little overwhelmed by the various bills, subscriptions, loans, etc., especially as your financial portfolio evolves.

Take the time to really organize yourself and take stock of your personal finances – all of your assets, investments, retirement accounts, and so on – so you can begin to understand and track your assets. This organization and understanding will help make important financial decisions because you can see your entire financial future and how it can affect your steps.

Consider using wealth management software like Personal Capital, which offers everything from specialized support to socially responsible investment opportunities.

3. Refinance your debt

When you are in debt, today’s low interest rates created the perfect opportunity to refinance and save thousands of dollars. This is true regardless of whether it’s getting a better mortgage rate, refinancing student loans with a private lender, or consolidating credit card debt with a personal loan.

How Much Can You Save? Depending on how much you owe and how long it takes to repay it, you could easily be up to thousands of dollars.

However, if you have student debt, consider this example:

Imagine having a student loan of $ 40,000 at 7% annual interest with a ten year payback horizon. In that case, you’d be paying $ 464.43 per month for a total cost of $ 55,732.07.

However, if you refinance to a new loan at 4% APR, you pay a monthly payment of only $ 404.98 and your total loan cost is $ 48,597.67.

Related: Should You Refinance Your Student Loans?

4. Protect your identity and finances

Most of us know that we should take steps to protect our identities, but putting them off is far too easy. Unfortunately, waiting for your identity to be protected can be catastrophic to your credit and finances. If someone succeeds in stealing your identity, you could even spend years and thousands of dollars fixing the mess.

Fortunately, there are many ways you can get set up to protect your identity without ever leaving your home. For example, you can:

  • Freeze your credit reports. According to the Federal Trade Commission (FTC), all three credit bureaus are required to freeze their credit reports for free. This action prevents anyone, including you, from opening new accounts on your behalf. If you decide to take out a loan or open a new credit card account, the first thing to do is to withdraw your balance.
  • Sign up for identity theft protection. Identity theft protection companies actively monitor your balance to look for fraud. Their services are far cheaper than you think and they do the grunt work for you.
  • Sign up for password protection services. Password managers like 1Password and Dashlane can protect your passwords and make it impossible for thieves to steal your information or hack into your accounts. These services are also incredibly affordable and easy to set up.

5. Make a will

If you don’t already have a will, quarantine is the perfect time to set up a will. This is a great way to ensure that your wealth gets where you want it if you suddenly die. Not only that, but many online services that allow you to set up a will allow you to set up a legal guardian to look after your children when you were away. You don’t want anyone else to decide. It is therefore wise to iron out these details and get them in writing beforehand.

You also don’t need to visit a law firm to set up this important information. Provided your estate and wishes are fairly simple, Trust & Will can handle the entire process from the comfort of your home.

6. Sell your “stuff”

If you follow our suggestion above to get yourself organized, you likely have a bunch of stuff – or even boxes of stuff – that you don’t want or need. You don’t have to waste your unused items, however. To move forward during the quarantine, you can always take steps to sell items that have some value.

Consider selling some items on your local Facebook marketplace or a Facebook community page. That way you can offload items to a local person and potentially avoid the shipping costs.

You can always sell things on eBay.com or even craigslist.org. If you have electronics that are new and in good condition, also visit Gazelle.com.

7. Track your expenses

Now is also an excellent time to sit down and face the reality of your financial situation. I’m talking about keeping track of your expenses – a useful task that pretty much everyone hates.

I would first sit down with your bank statements and credit card bills for the past three to four months. For each month of income and expenses, list each of your purchases in categories that make sense for your expenses, such as: B. Groceries, restaurants, entertainment, transportation, and subscriptions.

Finding out how much you’ve spent in each of these categories can be a very insightful experience. It is very common to believe that your grocery expenses are much lower than, for example, and this is especially true in restaurants.

If you never track your expenses, you never know where your money is going. Use the time it takes to face your real-world expenses in black and white and you won’t regret it.

8. Use a budget

Once you have tracked your spending and have an idea of ​​where you might be overspending, you have created the perfect scenario for using a budget. Your new budget cannot be anything more than a written spending plan that you create with pen and paper. However, there are also a variety of budgeting apps and tables that you can try out if you need outside help.

Budgeting software options that you should try include:

  • Pin that allows you to create a spreadsheet budget
  • You need a budget (YNAB) that you can use to create a zero sum budget
  • Qube Money that allows you to use envelope budgeting method using an app

Either way, the goal of a budget is to get you to spend less on things you don’t care about so you can save more on other aspects of your life. Budgeting doesn’t have to be painful or restrictive either. Budgeting may have gotten a bad rap over the years, but it really is nothing more than a plan for the money you work so hard to make.

Related: How to Create a Budget That Actually Works

9. Start a Side Hustle

Don’t forget about the different ways you can make more money now. There are so many ways to make money, and many of the best strategies are ones that hardly anyone knows about.

Ways to make money can be:

These are just a few of the options that you can consider. You can find more ideas in these posts:

The bottom line

While the quarantine brings many challenges to many of our lives, it can be seen as an opportunity to reassess and transform lifestyle. Whether you’re doing a massive spring cleaning or saving a surprising amount of money by not dining out, use that time to consider your financial goals and create a plan to achieve them.


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