4 Personal Finance Tips for Hard Times

Money management is difficult, even more so when a mental condition is thrown into the mix. Maybe you can only work part time, or you need to afford expensive therapies. Maybe you have a condition that affects your spending habits, like bipolar disorder.

Due to a mental condition, I have had my share of financial hard times. It is so hard to keep your finances in check when you are trying to put yourself together again. I hope you find my four personal finance tips useful:

1. Make a ‘rainy day’ account – It is important to save money for difficult times. If you do not have an account specifically set up for providing for difficult times, open one now. Ideally, you should have approximately three months’ worth of living expenses saved in this ‘rainy day’ account. If you cannot manage this yet, at least try to put $1500 – $3000 into the account. This account should also be difficult for you to access, as you should only be withdrawing from it in emergencies – like losing your job, needing to take time off, paying insurance premiums, or being admitted to hospital.
2. Make your lunch at home – When you are down and our (or manic and off with the fairies), it is easy to use simple luxuries, like eating out often, to try to make yourself feel better. Making your lunch at home every day could allow you to save a substantial amount on your weekly expenses. A couple of ideas: try making different types of toastie sandwiches, or beef up a boring salad with some cous cous.
3. Buy cheaper groceries – Minimising your expenses is an important budgeting skill. Can you buy cheaper brands at the supermarket? Are the fruit and vegetables cheaper at a farmers’ market? Do you stick to a shopping list? Minimise the weekly grocery bill, and food wastage, as much as possible. This will allow you to spend a little more money on things that matter, like hobbies that make you happy, or doing fun things with friends.
4. Follow the 50:30:20 rule – If possible, try to keep your weekly expenditure in the following proportions:
   50% essential expenses (e.g. rent, travel, groceries, insurances, gym membership)
   20% savings (including deposits into the ‘rainy day’ account and another savings account
   30% discretionary spending
   If your earnings do not allow you to follow these ratios, adjust them so you have enough money for each category.

By Alaska Green.