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Or what to do with the rest of our accounts during the quarantine
If you have strictly followed the recommendations of the health authorities to combat the coronavirus, have not traveled on vacation, have stopped eating at a restaurant and other entertainment, you have probably discovered that you have unexpectedly saved money. You sure like it and are already planning how to happily spend it on something long dreamed of when the pandemic ends. Or are you considering keeping them as a buffer for rainy days, if predictions of a bigger and longer global financial crisis than ten years ago come true.
Various experts are competing to analyze what is happening and, if possible, predict how it will affect the economy in the future. Will people return to their former consumer lifestyle, or will they like the slower pace, less work and expense? Business fears are well founded, as entire sectors such as tourism, air travel and the entertainment industry are threatened by massive bankruptcies.
In the United States alone, consumer spending, which accounts for more than two-thirds of economic activity, fell 10 percent in the second quarter, a record decline. Additionally, the percentage of income Americans save jumped to a record 25.7 percent from just 9.5 percent in the first three months of the year. Europe also posted a record 7% in 90 days, which is double the money saved by Europeans during the financial and economic crisis of 2008-2009.
A spokesman for the National Credit Counseling Foundation in the United States, Bruce McLarry, was not surprised by the figures. According to him, the pandemic is an unexpected opportunity for many people to save and do so. “The question is what to do with what is saved from now on. Either to help this money grow, or to reserve it for future emergencies. or just spend them when possible, “McLaughley told CNN. According to him, it is good that some of them do some fun activities after a long period of isolation and mental stress from the coronavirus, but most of them need to be maintained. The reason is that the uncertainty of the future is serious and more than ever it is necessary to have a financial cushion for emergencies.
So it’s a good idea to keep costs down, as you’ve been doing for the past six months. Of course, it is unrealistic to think that you can drive permanently with little money, such as during quarantine or when you have taken care of your children at home. Every return to active activity is associated with costs and if you cut them drastically, you are deprived of a full life. However, there are many tactics you can apply to maintain your new attitude toward saving work, even when normal life resumes. According to the experts, it’s all a matter of habits, and if you work on those that have to do with spending money, you will surely get results.
“It is important that people set their budget specifically and in writing. Recording income, expenses and potential savings creates better conditions for success, as it allows you to quickly assess progress in the desired direction,” explains Melinda Operman, president of the consulting agency. Credit.org. The company encourages its clients to continue to monitor the movement of every dollar in their bank accounts, to control their expenses and, if necessary, to make adjustments, but to record all this to get an idea of what brings them closer to or away from the desired result. .
This way you will be more motivated to deprive yourself of some things if necessary.
“There are several ways to do it. You can use a smartphone, a laptop, keep the receipts in a shoebox, enter everything in a spreadsheet or paper spreadsheet, in a pocket notebook or use another The reporting technique you like. ”The important thing is to be able to visually track what your money is spending and not make the common mistake of putting undue pressure on yourself to be perfect.
So, accept the budget as an opportunity to understand and navigate your financial behavior, rather than sticking to the “right path.”
“It’s like playing chess. Create a plan and research your opponent to get the best game you can. If you find his strategy isn’t working, adjust it,” said Jesse Sword, CEO of the budgeting software company.
It is very important to think of saving as a distribution of the time you dedicate to yourself, and not as a measure of austerity that limits your spending beyond a predetermined range. This will make it easier for you to discover what is good for you.
For example, if you like to enjoy good food, but you stopped going to restaurants and started learning how to cook at home, invest part of your savings in kitchen utensils and, why not, in a culinary course. The same goes for regular athletes, who have been forced to train at home due to the closure of gyms and the continuing suspicion that they are not a completely safe place. Whatever expensive device you buy now, it will certainly pay off in time if you continue without visiting a restaurant or gym.
If you don’t have such a passion that is worth investing in, simply open a savings account and transfer the funds unspent due to the coronavirus crisis into it. All banks offer such opportunities. Although the interest rates on savings accounts are not very high and there are often fees to “eat” them, it is still a way to get this money out of sight and not be tempted to spend it. Plus, you can automatically transfer small amounts from your checking account to your savings account each month, increasing your reserve fund.
There are options for higher returns on buying stocks, but they require larger amounts and some financial knowledge, as you can gain a lot, but also lose everything. Therefore, if you are a beginner to earning money, it is wise to play it safe.
In the midst of the crisis, the Bulgarians deposited BGN 936 million in banks.
In the worst period of the coronavirus crisis, from April to June, our people have managed to deposit BGN 936 million in banks, according to data announced by the BNB. This is significantly more compared to the same months last year, when BGN 643 million were received and compared to BGN 543 million received in the first quarter of 2020.
Data from national statistics also confirm that, as in many parts of the world, in our country people manage to save money due to reduced consumption. Bulgarians have cut spending on food, clothing, footwear, transportation, medicine and telecommunications services, but are keeping them on alcohol and cigarettes. They prefer to keep money in banks because they fear that whatever they invest in is risky.
However, according to economist Georgi Angelov, this leads to more harm than actually caused by the coronavirus. The more we save in bad times, the poorer we are because the economy is failing, he explains. According to him, due to this fear, consumption in our country is recovering at an extremely slow pace, around a percentage per month, unlike other European countries, where it quickly returned to pre-crisis levels. The reason is that in many of them the weak domestic demand of households and companies was significantly offset by the state budget, which was not the case in Bulgaria, as the state also committed to saving and accumulating budget surpluses.
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