Thanks to the coronavirus pandemic, many of us have taken a major financial hit this year. But you can get up off the mat and get your finances back on track in the year ahead. Here are a few tips on how to stage a financial comeback for 2021.
Cut back on all unnecessary expenses
How many video streaming services, premium cable channels, magazine, and online content subscriptions do you have? Do you really need all of them? Go through them and cut them down to a minimum. Also, if you do call streaming services or cable providers to ask to cancel your service, you may be pleasantly surprised by how much they will discount your bill in an effort to keep rather than cancel you.
Build an emergency fund
A painful lesson that many Americans learned during the pandemic is to get serious about having an emergency fund. Financial experts have always recommended having at least three months salary in savings in order to weather job loss such as what occurred during 2020. Unfortunately, many Americans did not even have a cushion of one month. The pandemic is a grim reminder of how you must get serious about building an emergency fund. Cut back on as much “discretionary spending” as you can, such as going to movies, concerts, or eating out for lunches or dinner, and put those savings directly into your emergency fund.
Drive less, walk more
You can save considerable money on gas, and get in better shape too, by driving less and walking or biking more. You will save money while doing your health and the environment some good.
Grocery shop smarter
Be less wasteful with the products you buy, use your fridge, and do not toss leftovers. When shopping, take the time to use coupons, take advantage of “buy-one-get-one” offers, and stock up on nonperishable items.
Have enough health, life, and disability insurance
If this pandemic has taught us anything, it’s that you need to plan for the unexpected, such as illnesses and deaths. You should shop around to see if you can cover the gaps if you do not have sufficient health, disability, or life insurance in place. If you are the main wage earner for your family and you suddenly become very ill, permanently disabled, or even die, the financial fallout could be devastating to your family.
Do you have any tips on how to get your finances back on track in 2021? Share them below.