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You are a Freelancer, and you want to save $800 A Month? Here is how to do it.

When COVID-19 reared its deadly head at the start of the year, like many fellow Singaporeans, I lost my job. I was retrenched from my position in a travel company in April, shortly after global lockdowns started shuttering airports around the world. 

Being forced to leave a project that was, essentially, my brainchild was a major dampener. But what took some of the sting away was that I had an immediate back-up plan. Freelance writing (which I had been doing on and off since 2018) would now be my main source of income. 

The only problem was that my earnings had now been reduced by about 40%. How was I going to meet my financial obligations — pay down debt, save for a home renovation, and settle the foundations of my future retirement nest egg?  

I realised I’d have to stretch a dollar into two, which was only possible with a magic wand. Since I didn’t have one, I had to make some drastic changes, and fast.  

Immediate savings in the aftermath 

Yes, being retrenched sucks. Being stuck at home because of Circuit Breaker also sucks. But the good thing is, I could immediately start saving money.   

Not having to step out every day saves me money in a couple of ways. First, I no longer need to commute for work, which ends up helping me save around $100 in transport every month. I also don’t have to pay for laundry services for work clothes any longer, saving me another $100 each month. Come to think of it, I won’t really need to buy new work/formal wear in a long time to come, given the stay-at-home situation. Easy shopping budget saved there!   

The one thing that I was wary of giving up was my everyday supplements. But I did — I stopped buying vitamins that I thought I needed to keep up my performance and energy, easily saving me another $50 a month. Side note — a blood test for a health check-up later revealed they weren’t working for me anyway. 

Without months of movie plans, coffee meet-ups, bubble tea runs and Shake Shack Fridays, I found myself saving a cool $200 or so at the end of the month. 

Fighting essentials, debt, and insurance concerns 

While I could reduce my discretionary/recreational spending, other essentials such as food, utilities, insurance premiums and mortgage installments had to continue to be paid. There’s no way of putting a hold on those, and that’s where my worries stemmed from. How was I going to pay for essentials without a steady stream of income?  

I also had to keep up with monthly payments for personal loans while paying off credit card balances. And this bit was particularly worrisome. A combination of poor decisions in the past, recklessness and bad timing had resulted in me coughing up around $1,500 in debt repayment each month, with $1,000 just to cover minimum payments. This began keeping me up at night. 

I had worked out a two-year plan to clear off my debt entirely, but clearly that was now out the window. I had to do something about my interest payments. 

Finding savings where there were none  

Thankfully, I found out about the Special Finance Relief Programme (SFRP), launched to help Singaporeans affected by COVID-19 manage their debt obligations 

Under this programme, you may apply for special arrangements to restructure your debt or reduce payments across a suite of debt arrangements. You’d have to meet the qualifying criteria, though, chief among which is a loss of income of more than 25%.  

In my case, I could convert my credit card balances to fixed term loans at 5% per annum, which is a massive reduction considering the average credit card interest of around 29% per annum. Thanks to the SFRP, I reduced my debt repayment by around $500 each month!  

Finding a steady source of income 

So far, I’ve reduced my monthly expenses by about $950 per month, but that’s about as far I could go. I knew cutting down my expenses was only one side of the coin. The other side was to increase my earnings.  

This is crucial because, for the moment, I have placed on hold two other important financial goals — saving up for an increasingly urgent home renovation and investments to grow my nest egg. These are particularly critical goals for me, but I don’t have the funds for them at my current stream of income. 

 

Source : https://sg.news.yahoo.com/

 

Read More :

Tips to Settle Into a Workplace After Starting a New Job During the Pandemic

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