With the new year comes new opportunities to get your finances back on track. But it’s not something that will happen by chance, consumers will have to make a deliberate effort to achieve their goals. The strategic effort is necessary now more than ever as the novel coronavirus has changed the economic landscape around the world. Below are a few money strategies to consider in the new year while the pandemic persists.
Budget update
The coronavirus pandemic has significantly altered the way of life for many people. In more cases than not livelihoods have been thrown into disarray, forcing consumers to get creative and think outside of the box in order to meet their basic needs. In the new year, your budget must account for the new normal. Be careful to ensure that you do not recycle the same budget you used last year. Spend some time to decipher the nuances the pandemic has created in your life and particularly how it has affected your earnings. This will help to ensure that your budget is realistic and not aspirational. By updating your budget you may even find that you have a surplus in certain areas which could be redirected to savings or investments.
Revise financial goals
The coronavirus pandemic has created new opportunities for some while delaying the dreams and hopes of others. In either scenario, now is the time to revise your financial goals. Depending on your situation you may be able to adjust your target to a later date or move it to a closer date. While contemplating this decision, you may want to consider realistic steps which will get you closer to achieving your financial goal. The aim is to ensure that your financial goals are achievable within realistic timelines in light of the challenges created by the coronavirus pandemic. It is healthy to revise your goals as it eases the burden you may have to bear especially in a time when finances are constrained.
Pay down debt
As a new year approaches it would be prudent to consider delinquent credit card payments or loans for which you may have deferred payment. As you make plans to use your money wisely in the new year you must account for your existing debt which, if left unattended, can become a burden. It is important to note that paying down debt is not an overnight solution and in some cases, it can last the entire year or longer. However, it is important to make a plan and a commitment to pay down your debt so that you can enjoy the experience of financial freedom. Akin to this strategy is the importance of avoiding unsustainable debt which can plunge you deeper into financial catastrophe.
Restore emergency saving
Many persons may have reached into their emergency savings over the past year for one reason or another. It is crucial to replenish those funds to be used as a buffer for future unexpected eventualities. It is also important to incrementally grow your emergency savings if possible. Emergency saving as the name suggests should only be used when all other financial options available to you are exhausted. It should be different from your regular savings and investments and should not hinge on borrowing. If possible you should ensure that your emergency savings are kept in an account that does not allow easy access to withdraw funds to ensure that the funds are not depleted over time.
Will you be implementing these tips?
