The world has experienced an event that has changed how we live and interact with one another, indefinitely. Experiencing the pandemic has shook many to their financial core. Job loss has affected hundreds, maybe even thousands of Trinbagonians and it’s more important now than ever, as Trinidad and Tobago starts to make its way out of a world-wide pandemic, to be money smart and financially responsible.
No matter what end of the financial scale you fall on, it’s important to ask yourself “How can I manage my money more effectively so that I can get back to doing the things I enjoyed pre-pandemic?”
Working towards smarter financial decisions is key to helping you return to as close to a “pre” pandemic life as possible. You crave your weekly ritual of Tuesday night movies at MovieTowne. Or you want to start a new tradition of taking a staycation once a year to experience a new part of the country to unwind from the stressors of work. Good money habits can help you move forward financially and get you back to doing the things you were used to, pre-pandemic.
Here are 4 habits we believe every Trinbagonian should have.
Monthly Money Plan – a goal without a plan is just a wish.
A monthly money plan is a helpful tool that can assist you with reaching your money goals. It is a plan that maps out your monthly financial spending so you can better plan and save towards your money goals. The first step before creating a monthly money plan is to identify your existing monthly financial obligations. This includes your car loan payments, your mobile bill, and groceries to name a few. Once this has been outlined you have a clearer picture of where your money goes every month and how much you have left over after your financial responsibilities have been paid. You can now make an informed decision of where you want to spend those extra funds. For example, if you’re planning to surprise your significant other for your anniversary 6 months from now, you can begin putting money aside now so that it’s not a financial burden on your anniversary.
Automatic savings – Paying yourself first is the simplest way to save towards your money goals, and automatic savings makes this even easier to do. Similarly, to a standing order, this type of savings method automatically deducts a specified amount of money from your bank account each month and deposits it into a savings account. You can start with as little as $100 a month, and as your financial situation changes you can adjust to suit. Maybe you get a promotion or a raise in your salary, you have the flexibility of increasing the amount of money that is automatically deposited into your savings. This method makes saving a consistent priority and is one of the simplest habits to get started. Just set it up and forget it, no need to manually transfer from your day-to-day account to your savings account.
Upgrade financial knowledge – we all know that popular phrase, knowledge is power, the more you know, the more you can do. The same goes for understanding your finances. Do you know how much the interest rate on your credit card is, and how it’s applied? You don’t need to be a financial expert but taking the time to better understand the smaller ins and outs can help you make informed financial decisions in the future. For example, if you understand how interest rates work, you’ll be in a better position to choose a credit card that is best suited for your needs.
The goal is to equip you with enough knowledge and understanding so you have the power to make informed financial decisions, or at least prompt you to ask the right questions when it comes to your financial situation.
Financial Maintenance – the same way your car requires an oil change and maintenance check every couple of months, your finances need the same attention. It’s important to continuously assess (on a quarter or bi-annual basis) your current money plans and see whether you’re on track or not. By performing regular “maintenance” checks on your money plans and savings accounts, you’re able to determine if you need to make any adjustments. Maybe you’re able to put away more savings in 6 months than you were when you initially created your monthly money plan. With regular financial maintenance checks, you’re able to spot these changes with ease and take the steps to fine-tune your plans as you go along.
There are several smartphone apps available that can help track your monthly expenses and create monthly money plans based on your spending. By manually entering your spending every month, you are able to view a holistic picture of your true money spending habits and use this information to create good money habits to get you on your way to reaching your money goals.
