Be Financially Savvy – Even During the COVID-19 Pandemic
Whether you’re struggling to manage your money in a time of crisis, or you’ve just received your largest raise to date, any minor change to your finances can be a major lifestyle adjustment. It’s understandable to not make the best spending decisions with your money, especially when enduring such trying, uncertain financial times.
No matter how much money you’re earning, you need to know how to best manage it for the sake of your financial health in the long run. Here are some tips to ensure you’re being smart with your income both in the short and long term.
Cut back on spending
An economic downturn is the perfect time to cut back on your daily and monthly spending. The more expenses you reduce or eliminate altogether, the less detrimental a pay cut will feel. For example, you can make minor adjustments to your daily habits by choosing off-brand products, buying in bulk, or switching to cheaper alternatives to services like cable and internet. Or, you can reevaluate major expenses like mortgage payments by considering a refinance to minimize your monthly bills. Once you start being conscious of unnecessary spending and learn about ways to reduce recurring fees, you can boost your savings and turn money into more money.
Put more into retirement
Even if you’re already contributing a certain percentage of your salary to a retirement fund, don’t forget to make an increase to that contribution whenever you can. Any small gain in percentage can have a substantial impact on your total funds when you finally reach retirement and gain access to the money you’ve invested from each paycheck. If you’re not sure how much to commit to your 401k, learn more about your employer’s match program and talk to a financial advisor to find out if you can manage the 10-15% contribution that most experts recommend.
Boost your automatic-savings
Did you know almost 70% of people have less than $1,000 in their savings? And that 45% have no savings whatsoever? This is surely quite shocking to hear, especially when thinking about how helpful an emergency fund can be in times like this. A comfortable savings account should be one of your top financial goals– rich or poor. Make sure to adjust your auto-savings deposits to your account for boosts to your emergency fund. A healthy savings account paired with a sizable 401k can help you live a comfortable life in retirement and give you peace of mind in case of emergencies such as layoffs or medical mishaps.
Pay down debt
Another wise financial move to make is to pay down some of your existing debt. Getting some of those credit card bills or student loans out of the way can free up funds to allocate toward your retirement, savings account, or both. Not to mention the benefits that paying off debt has on your financial health, like improving your credit score and your chances of getting approved for major loans like mortgages or personal loans. If you can, use your dollars saved each month to make bigger payments and pay off loans sooner, saving tons of money on interest.
Whether you’re unemployed, recently promoted, or just going through the motions, take any opportunity to further your financial savviness. Learning more about wealth management now will help you take control of your career and set you up with a more comfortable life both right now and years into the future.
