This year was eye-opening for so many reasons. The pandemic shed light on the importance of health and wellness, the value of families and friendships, and the significance of cherishing the simplicities of life. It also exposed the nation’s deep-rooted issues with civil and social injustices and politics, causing people to take notice, come together, and stand up for what they believe in. Life amid a national health crisis has also taught individuals the necessity of financial stability.
Millions of Americans found themselves unable to afford rent, mortgages, utilities, groceries, and other necessities. Job security reached an all-time low as unemployment rates skyrocketed, and businesses struggled to stay afloat. Government and private programs and agencies designed to help those in need ran out of funds and resources, which resulted in an increasing number of homeless and hungry families nationwide.
Preparing For 2021
While the approval of COVID-19 vaccinations gives the country hope as we usher in the new year, it could take years for the economy to bounce back. As such, everyone is encouraged to learn from the past 12 months and get things in order. If you’re looking for ways to improve your finances for 2021 and beyond, here are some steps to consider.
Review Your Finances
Now is the time to take a look at your finances. Review your annual income, savings accounts, debts, monthly expenses, and spending habits to assess areas of strength and weaknesses. As you review your finances, ask yourself questions to determine what needs to be done going forward. Are you still employed? If so, is your monthly income enough to cover your expenses? How much money did you save? How much debt did you accumulate? Did you spend frivolously this year, or were you mindful and savvy when shopping?
Manage Debt
The more debt you have, the harder it is to pay for things you want or need. It also reduces your ability to acquire things like houses, cars, loans, and credit cards. Before the new year begins, develop a debt management plan to reduce your out of pocket expenses. Contact creditors and service providers to come up with a feasible repayment plan or settlement.
If you have a lot of credit card accounts, you can look into consolidation options to reduce the number of payments, payment amount, and interest rates. For student loan borrowers, there are many options ranging from forbearance and deferment to income-based repayment and consolidation.
Boost Your Savings
Whether you had to dip into your savings or not, this past year has taught us the importance of having a nest egg in case of an emergency. Review your income and expenses and figure out how to increase your savings. You could increase your contribution, cut back on your spending, or look into earning opportunities to add more money to the pot.
New Income Sources
Seemingly overnight, millions of Americans found themselves without a job and in debt as a result of the pandemic. While the nation’s economy seems to be making some improvements, one can never be too sure of what the future holds. That’s why it is ideal to find new sources of income. Should something happen to your job, you have something to fall back on. Additional money can also help you manage your debt, increase your savings, and invest in your financial future.
There’s no shortage of money-making ideas out there to consider. From starting your own business or side hustle to becoming an independent contractor for established organizations, there is something to suit your skills, experience, and lifestyle.
Most would agree that the past year has left them tapped out financially. As you enter into the new year, take the lessons learned, and apply them to safeguard your future. By assessing your finances, capitalizing on your strengths, working on your weaknesses, getting your debt under control, increasing your savings, and finding new ways to make money, you’ll find it a lot easier to get through whatever 2021 brings.
