Wasting your money - especially in times of crisis?
Now that the number of Covid-19 sick continues to fall sharply and healthcare can breathe again, there is room to collect the financial fragments of the crisis. Those fragments turn out to be substantial. According to DNB, a deep, almost global economic recession is to be expected as a result of the corona pandemic in the first half of 2020. In the Netherlands, the economy shrinks about 6.4 percent, twice as much as in 2009 during the credit crisis. The Dutch Bank does expect some recovery in the second half of the year, but we will only stick to 2015 GDP.
It is therefore not surprising that the fear of the financial damage is grabbing consumers by the throat. Consumer confidence in the economy has fallen sharply. Major expenditures are being postponed, people are closely scrutinizing their spending habits and at Snaploan Online we have also noticed a sharp drop in applications for car loans, for example.
We think it is an excellent idea to take a critical look at where the money is actually going in these times of corona crisis. Anyone who considers their own spending pattern with an honest look and some self-knowledge will notice that there is always room for improvement. But how?
With some good tips, many people can discover that their money can continue to roll, even - or precisely - in times of economic recession. But then roles to things that benefit you now or later, expenses that bring happiness, that bring peace and even money.
Here we would like to share 3 tips to smartly 'spend' your money - especially in times of crisis.
3 Tips to waste money for a better future
1. Looking differently at material assets and 'habit expenditure'
Humans are creatures of habit and value convenience. This also applies to the spending pattern: eating out twice a week (okay, not during the lockdown), impulse purchases on the weekend (as a reward for another week of hard work), the latest technical gadgets or subscriptions that are never used. Our tip: look at what is essential to you at this point in your life and be honest: are there any expenses that cause stress or tire you, make you poorer as a person, or serve no apparent use? Get rid of it!
Then ask yourself what really makes you happy. To do a study? 3 months on the road (as soon as that is possible again) or your own caravan ? And why does that bring you happiness?
Then stop shopping (online), because with those expenses you only enrich a product giant or service provider. Instead, spend the money saved on yourself: via internet banking you can set a fixed amount or percentage to go to your investment account or savings account every month. Or create an extra savings account for a long-cherished dream.
In this way, your money no longer evaporates on 'habitual expenses', but you invest in yourself. Think big and think long-term: saving or investing a few hundred us dollars per month will yield tens of thousands of euros in 10 years' time!
2. Choose 5 life goals and live them
Now that you are about to fill a piggy bank or investment account for big expenses or a long-term dream, it is time for the next step: live every day according to your life goals.
To do this, you choose your 5 most important life goals from this list: security, freedom, happiness, peace, pleasure, travel, power, family, marriage, friends, contributions, wisdom, independence, adventure, spiritual development, growth, love, balance, health.
Then you cut out the other 'bycatch' and only buy, do and invest in things that clearly contribute to your top 5 life goals. And that can cost money.
3. Pay off your loans
Our final tip is about paying off debt to get ahead. After all, debt slows down your plans and can even cause financial worries and other profound problems.
Many consumers do not realize that loans can take many guises. Almost all of us have to deal with it: a student debt, installment purchases, a car loan, private lease, loyalty card credits, overdrafts, mortgage, payday loan or a personal loan. The interest on these loans ranges from 3.5% to 14%. So you not only repay the borrowed money, but also interest on top of that. That is just a waste of money, at the expense of your dream and your personal top 5 life goals.
With a loan from a traditional large bank, you lose money every day. Even better than saving or investing is to pay off your loans as quickly as possible. Or, if that is not yet possible, transferring several expensive loans to one clear and much cheaper loan. That sounds contradictory, borrow money to get rid of your debts. But anyone who transfers several expensive loans to one affordable personal loan immediately takes a step in the right direction: overview, peace of mind and ultimately paying off all debts as quickly as possible.
Wasting money to eventually earn it back: there is no better investment in yourself and your dreams / future. In this way the economic fragments become manageable and you get through this crisis well.