The economy is finally stabilizing with restrictions being lifted and businesses reopening, after a long year of financial instability due to the COVID-19 pandemic. However, according to market research, nearly half of all non-retired Americans are worried that they will not be able to achieve their financial goals. As we move forward in a post-COVID world, it is important to prioritize and enhance your financial situation in any way you can. We’ve put together a list of four of the top financial moves to make to reduce your financial stress and burdens.
1. Track and Budget Your Spendings
Getting out of debt doesn’t have to be so complicated. With the proper financial strategies, you can get yourself back on track. It can be easy to manage your debt if you can properly track your spendings and create a budget for your regular spending. If you can successfully track and allocate your spendings, you will be able to create the best action plan to pay off your debt. Some ways you can track your spendings are to create a journal, keep your receipts, and utilize a money management application. You can never be too intricate with your finances.
If you have multiple debts or loans, make sure to set deadlines for yourself. In doing so, you will be able to make minimum payments on a regular basis to slowly but surely fund one debt at a time, without breaking the bank. Keep in mind that you can renegotiate your credit card contracts and fees to reduce financial burdens on yourself.
2. Establish an Emergency Fund
The recent pandemic has taught us to stay vigilant and to be always prepared for the unexpected. Although it is hard to predict what can happen in the future, it is always best to be prepared for the worst. Emergency funds are crucial to your financial security because they act as a safeguard against sudden unanticipated circumstances.
To set up an emergency fund, create separate savings accounts wherein you can put a set amount of money each month. Don’t be afraid to start small. In the long run, every dollar counts. You will be able to rack up a good amount of money to help you push through the after-effects of unforeseen circumstances. An emergency fund can help better the lives of you and your loved ones, especially if you have more than one person relying on you.
3. Eliminate Unnecessary Spending
Now is the best time to reexamine and reevaluate what you are regularly spending on. You may not know it but you might be spending on things that you don’t really need or use anymore. Small monthly expenses may go unnoticed in your bank account but can rack up to large amounts when left unchecked. List out the services that you regularly use and make sure to unsubscribe from the services that you may not be using anymore to save those funds for something else you may need.
It is also essential to distinguish between your “needs” and “wants.” Ask yourself: Do I need all the services I am paying for at the moment? By cutting out unnecessary expenses, you will be able to focus on the things you need to be spending on, such as groceries, utilities, rent, and more. In the long run, you will be able to see how much of a difference it makes in your financial statements.
4. Utilize a Variety of Savings Tools
In this digital age, there are so many different types of new technologies and applications that can save you money and reach your financial goals. Here are 3 savings tools that you should be using:
Basic Savings Account: Opening a basic savings account will allow you to get low interest rates with low minimum balance requirements. Although interest rates may vary, every bank will offer a basic savings account. The best plan for yourself depends on your current circumstances.
Certificates of Deposit: Certificates of Deposit are provided by a bank or credit union. When you leave a deposit untouched for some time, you get a premium interest rate. This is a safe investment in the long run because the funds are essentially guaranteed.
Money Market Savings Account: This type of savings account is offered by your bank. Although this type of account has a higher minimum deposit requirement than basic savings accounts, the interest rates are 2-3% higher as well.
For many Americans, it has been a long year of financial crises. However, there is always a light at the end of the tunnel. You can set yourself up for financial security by following these easy tips. The sooner you start developing good spending and saving habits, the sooner you will be able to bounce back from your financial burdens.