Getting Out Of A Financial Hole Post-Covid – Part 2

Americans are prioritizing reducing their credit card debt during the pandemic. As many found themselves laid off or unemployed, households have dramatically transformed their budget strategy to face the crisis. As a result, the post-COVID financial hole is retrospectively speaking, less alarming than it could have been. Nevertheless, it remains a source of worry for many households. 

Americans have been building plans to stabilize their finances as businesses reopen. In the first article, we’ve already touched on the main priorities to recover in a post-COVID world. For households, debt consolidation companies and advisors have been preferred interlocutors putting existing debts behind. Removing former debts, such as student loans, is a necessity to start anew safely and create financial breathing room. Last, but not least, now is the best time to look for a new job, as businesses are ready to recoup their losses. Why not go the extra mile and add some freelancing activities to bring a few extra dollars on the side? 

However, addressing debts and boosting your professional income can only get you so far. If you are going to build a sustainable financial future, you need to eliminate unnecessary waste and diversify your income. Here’s the second part of our Getting Out Of A Financial Hole Post-Covid series. 

Can you cut down current costs?

Looking for a new job can help to bring income to your household – especially after the pandemic low – but it may not be sufficient to reduce debt effectively. Living costs can burn through up to 30% to 50% of your income, depending on your situation. Some households spend over half of their income on living expenses. If you want to tackle pandemic losses, the easiest way is to cut down your living costs. 

Thankfully, there are plenty of solutions. If you rent out a home, you can look for a cheaper location. With the increase in remote working positions, geographic proximity to the office may not be a priority anymore. In other words, tenants can move just on the outskirts of the city and save a ton of money on their rent. As a homeowner, relocating to a new place can let you cut down your mortgage repayment. You organize a stress-free move with professional local removalists, who can get your belongings safely to your new home. Some homeowners also consider downsizing, which can reduce not only mortgage costs but also energy bills. However, when it comes to downsizing, it’s worth remembering that the option may not be suitable for large families. 

Reduce food waste

You are what you eat. 

If the saying is true, it’s hard to guess what the population is. America accumulates approximately 40% of food waste. Waste can occur for a variety of reasons. However, uneaten food puts unnecessary strain on your budget. Households are responsible for the major part of food waste. Americans waste 76 billion pounds of food per year. When it comes to budgeting waste, you can count over $1,800 of wasted food per year per person. For a family of 5, for instance, that’s over $9,000 that goes directly into the bin. You could find a much better way of using all that money. 

Reducing food waste requires strategic planning. Don’t shop more than you need, otherwise you’ll end up throwing fresh ingredients away. Sticking to appropriate portion sizes can also make a big difference. When you serve too much food, you will always have to get rid of the leftovers. If you buy in bulk to save money, prepare your dishes in bulk too and freeze them for later. If you’ve got too much fruit that’s going bad, make jam instead. Your vegetables can be canned and conserved too, if you don’t want to freeze them. 

Declutter for profit
Everybody accumulates clutter they don’t need or want. Whether it was a gift or an item that you don’t longer use, your clutter could make some money. Decluttering is not a get-rich-overnight recipe. However, you can create a modest source of income. Parents can sell clothes and toys that their children don’t use anymore, as long as these are still in good condition. If you have a young child, selling nursery furniture and baby products can be surprisingly profitable! But it’s important to be honest about it. Some are too old or damaged to be sold, or to bring a lot of money. Be fair about it! 

DIY is a breath of fresh air… and money

For a lot of people, staying at home during the pandemic has renewed their love for crafting and DIY. Craft hobbies are good for the soul. They  help you relax, which is all you need when you’re self-isolating! But, if you’ve been a busy bee crafting, you may find that your hobby could be sold online. Places such as Etsy love individual crafters and are happy to promote your products. Is there a lot of money in a DIY passion? Not at first, but more and more independent crafters can replace their full-time job through inexpensive sewing, paper art, or even DIY pallet decor. 

Blogging can become a side hustle

It would be foolish not to mention the monetizing side of blogging on a blog, right? Bloggers, vlogger – video blogs – and other online influencers can make money by sharing their stories online. Millions of people around the world are using their digital presence as a side hustle business, or even a way of replacing their 9-to-5 job, so it’s fair to say that there is still money in the business. Advertising, sponsoring, and additional service packages can be a game-changer. The bottom line: If you pick the right niche, you can reach out to a broad audience and make a name for yourself quickly! 

Stay away from quick wins

Just like with dieting, there is no miracle solution. You are unlikely to recover your losses overnight. Therefore, it’s a good idea to focus on long-term solutions and design your budget accordingly. As tempting as it is to tell yourself that you’ll work double shifts for a couple of months to pay off your debts, the truth is that it’s a dangerous strategy. You’re only going to exhaust yourself and make the financial situation worse. There is no quick win, bank on financial endurance! 

Hopefully, this second part of getting out of the COVID financial hole guide can give you new ideas to get started. Be positive. There is always a way forward if you look for it!