The COVID-19 pandemic has fundamentally changed our lives. All of us are grappling with the logistical, psychological, emotional and financial complexities of this “new normal”. Lots of us are working from home at reduced pay. Some of us may have spouses who are now out of work and unable to contribute towards household bills. Even if you’ve recently received a stimulus check, you know that the money isn’t going to be enough of a buffer to protect you from financial uncertainty. Every penny counts. So it’s vital that you avoid these 5 money mistakes while on lockdown…
Neglecting the importance of budgeting
These are unprecedented times. But that doesn’t mean that you can afford to relax your normal safeguards that protect your household’s financial health. Be sure to keep using your household budget template. Without it, all the little sundry expenses can quickly add up. And every time you check your bank balance you could be met with a profoundly unpleasant surprise.
Paying over the odds for auto insurance
If you still need to use your car, don’t make the mistake of assuming that your car insurance provider will reward your loyalty when your policy rolls over. Be proactive and look for other auto insurance providers who will be able to get you a better deal that is better suited to your recently altered needs and budget. Furthermore, if you’re no longer using your vehicle at all while you’re on lockdown, you don’t need to insure your vehicle at all so long as it is kept in the garage or on your driveway. Take a look at this advice on suspending car insurance while on lockdown.
Panic selling your investments
Your investment portfolio probably doesn’t make for comfortable reading right now. Nonetheless, resist the urge to panic sell. This may create way more problems for you down the road than it could ever solve now. The economy is in a state of flux. However, it’s bounced back after bigger hits than this.
Underinvesting in your home productivity
Finally, now might be a good time to look at your current phone and broadband package. It may be bottlenecking your bandwidth and, as such, preventing you from carrying out your business tasks efficiently. Now’s the time to invest in a more robust package that’s faster and free of bandwidth of download restrictions. Yes, this will mean paying a little more each month. But given that a slow internet connection can cist up to 40 minutes a day’s worth of productivity, it may be sheer false economy to under invest now.
Suspending payments into your savings account
Finally, when money is tight, the temptation to stop paying into your savings is understandable. However, this is the very essence of false economy. Your savings are now more important than ever. Neglect them at your peril. You’ve no idea when you may need to rely on them. By all means, reduce your direct debits into your savings account. But don’t let your savings account go without anything.
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