For the last year, millions of people in the U.S. have been struggling, not only with social restrictions and fear of illness, but financially as well. Whether you’re struggling to pay household expenses, medical bills, or looking to find employment, the pandemic has contributed significantly to financial insecurity.
According to the Pew Research Center, roughly half of non-retired adults say the economic fallout from the pandemic will make it harder to achieve their financial goals. But you can create a healthier financial future for yourself – here’s how to do it:
1. Take advantage of financial assistance. Make sure you’re utilizing the federal programs in place that are offering assistance to people struggling due to the pandemic. For the many people who are behind on their mortgage payments, the CARES Act temporarily protects you from losing your home to foreclosure and entitles you to a hardship forbearance. If you’re struggling with other financial challenges, there are a variety of unemployment programs that have been extended until September and income tax waivers that will reduce the amount of taxes owed from 2020. Locally, you may also find other programs that can offer help. Interest rates are also lower right now, so experts advise that now would be the time to refinance your mortgage or student loans.
2. Budget. Yes, it may seem like a no-brainer, but budgeting requires you to take a good look at all your finances, including monthly income and expenses. When everything is in front of you, you’ll be able to prioritize the necessities and cut down on the luxuries. You can also find ways to cut back, whether it’s eliminating a streaming membership or refraining from eating out. Check your credit card statement for additional services you can cancel. While you’re figuring out the budget, make sure to prioritize paying off all your debt.
3. Pay it off. You might be asking, how? Especially if you’re already struggling. But take a deep breath—this is also doable. While you can always pay the minimum payment until you’re debt free, there are several techniques that are recommended when paying off unsecured loans. This includes the debt avalanche, the debt snowball, and working with credit counselors who can help you get a better grasp on your finances through a debt management program.
4. Save, save, save. Whether it’s for emergency use or toward retirement, putting money away in a savings account is a must. One way to begin is to take any money from stimulus checks or tax returns and add it to a savings account or retirement plan. Of course, steps one, two, and three will all set you on the path toward greater savings.
5. Get financially educated. Knowing how your finances work is crucial toward managing your money better going forward. There are financial classes and workshops dedicated to this very topic. Becoming more financially literate will help you make more informed decisions so that you can build a strong financial future.