1. Monitor your spending

Girl with blue wallet full of money
Africa Studio / Shutterstock

It’s time to get your budget on a tight leash.

Assuming you’ve been stuck at home during the pandemic, your lifestyle has totally changed. You’ll want to do a complete reset of your budget. For example, you’ve probably got bigger grocery bills and lower gas costs, so revise your numbers accordingly.

Not sure where all your money is going? Is it your takeout lunches? Have you signed up for too many subscriptions and memberships? Has your car become a money pit? You may want to download a budgeting app that automatically monitors what you spend your money on and warns you when your balance is low.

Next, you’ll want to reduce your use of credit cards whenever possible so you’re spending only money that you have. Cash-back rewards and the ability to shop online are big draws, to be sure, but you can get debit cards that will do both of those things. Some will offer as much as 10% cash back, so you can start exploiting your purchases instead of losing money in interest.

Bill Gates made a splash in 2017 when he bought $520 million worth of U.S. farmland, and he’s continued to invest since. What’s in it for Gates?

Read More

2. Erase your credit card debt

black businessman happy expression
Kues / Shutterstock

This could be a big job, so take baby steps. Reduce your debt little by little, paying what you can with the money you’ve saved.

But first, you’ll definitely want to look into a few ways to ease your burden.

If you’re bogged down with a lot of high-interest credit, you could try a balance transfer. With a good credit score, you could qualify for a new card with a 0% APR for a set period of time. Then you can transfer your old balance over to it. You’ll still owe the same amount of money, but you’ll be able to pay it down without more interest fighting you along the way.

It also doesn’t hurt to talk to your creditors. Just pick up the phone, dial the number on the back of your card and try negotiating for a lower rate. Credit card companies are like any other: They want to keep your business. Plus, the pandemic has inspired some companies to defer payments and even pause interest for borrowers in trouble.

Lastly, if you’ve got multiple high-interest bills, you can save yourself a lot of money and headaches by consolidating your debt into one lower-interest loan.

You can make single monthly payments to give yourself some breathing room and save up for each pay date. Do some digging and compare different lenders online to find the offer that works best for you. You could free yourself sooner than you think, and with an APR as low as 4.99%.

3. Set up your emergency fund

A piggy bank with security and lock in public park, saving money for real estate  and property protection concept.
Watchara Ritjan / Shutterstock

Once your debt is in a more manageable place, it’s time to start saving and reserve some of your income for emergencies.

Even if you haven’t lost work due to the coronavirus lockdown, a layoff could still be looming. And you never know when your car might break down or your cat might get sick.

A common rule of thumb is to have cash equal to three to six months of expenses on hand. That will give you time to find a new job and allow you to pay any big, unexpected bill.

While that money is just sitting around unused, you’ll want to put it to work. Hoard your cash in a high-yield savings account, which will earn you greater interest than a typical savings account. And if you’re concerned about potential maintenance fees, don’t worry. Not all bank accounts require monthly fees, so you can decide which account suits you best.

Once you get a routine going — you may want to set up automatic deposits — you’ll hit that three-to-six-month milestone in no time.

Then you can sit back and marvel at the progress you’ve made: from a mountain of credit-card debt to a comfortable cushion of cash.

Are you thinking about saving? Well, stop thinking about it!

Take the change out of your piggy bank and make it work for you.

Acorns is a financial wellness tool that automatically rounds up your card purchases to the nearest dollar and puts those savings into an investment account. It takes the worrying out of investing and matches you with one of five investment portfolios.

Take five minutes to sign up for Acorns today and collect a $10 bonus.

About the Author

Serah Louis

Serah Louis

Senior Staff Writer

Serah Louis is a staff writer with MoneyWise.com. She has a Bachelor of Science from the University of Toronto, where she double majored in Biology and Professional Writing and Communications.

What to Read Next

Biden Extends the Long Student Loan Pause While Debt Forgiveness Still Waits

Here's how to take advantage of the new reprieve — in case debt cancellation never comes.

Take a Break From Your Debt This Month

Let debt consolidation give you a break.

Should You Get a Personal Loan or Personal Line of Credit?

To make the right choice, you need to know the differences and your own needs.

Struggling to Get Your Startup Funded? Here Are 3 Ways to Make Investors Believe in You

Attracting a significant amount of capital requires more than an exciting idea.


The content provided on MoneyWise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.