The American people have had no choice but to financially hang on through nearly the entirety of 2020 with little help from the federal government. Since many people are struggling to keep food on the table and see the eviction protections coming to an end at the close of 2020, it is reasonable to wonder how we’ll make it through the second year. Will year two look like year one, and if so, what are some things families can do today to prepare?
No one has a crystal ball, but preparing for the worst and hoping for the best seems to apply in these unstable times. Remember, there are ways you can safeguard what you have as we all prepare to enter 2021 with a possible new government and uncertainty about the continued stamina of the coronavirus.
COVID-19 and 2021
We certainly don’t know what will happen with COVID-19 in 2021, but the hope is there will be a vaccine, an effective treatment, or both. Even still, we can’t foresee the lasting effects this pandemic will have on families, businesses, and the economy going forward.
The good news is that you know going into the new year that there is a pandemic. Not only that, but you are aware of the impact it had on you this year, which leaves you in a better position to plan ahead. Although next year will bring a struggling economy with it, there are steps you can take to protect you and your family.
Take a Hard Look at Your Finances
You’re probably not in the same financial position you were before March 2020, so try not to think of where you were and only concentrate on where you are. Look at your income and expenses and see where you can make adjustments in both categories. Can you pick up a side job or further your education to bring in more money? Are there any expenses you really don’t need like Netflix or unlimited data on your phone?
Just because you make adjustments now, that doesn’t mean they have to stay in place forever. But for now, do whatever is necessary to widen the gap between your income and expenses. That will give you the opportunity to start a savings fund, invest in the market, or buy real estate. You need things that will add to your wealth and not drain it.
Eliminate Your Debt
A significant drain on your wealth and your budget is carrying large amounts of debt. You can’t grow or protect yourself from financial ruin if you’re knee-deep in various types of debt. So, look at the totals you have outstanding, and take note of the minimum payments you make each month and their interest rates. Slowly paying those off will only drag you down, so you need to remove the amounts as soon as you can.
A straightforward way to do that is to consolidate your outstanding debt into one loan, which will give you a reasonable interest rate and one payment. Although that doesn’t eliminate your debt, it does help you see a clear path to ridding yourself of that credit card drain for good. As long as you don’t continue to use your credit cards, loan consolidation can be an effective way to lead you to financial freedom.
If you need to pay off your mounting debt, see how Georgetown Funding can help you free up extra money for the year to come.
Make the Most of Your Money
Whether you came into this pandemic with debt or you acquired it out of necessity during the 2020 pandemic, there’s a way out. Look at the money you have now and make the most of it by paying down or eliminating the items that strain your finances and build a safety net you can count on, no matter what 2021 brings.