The pandemic caused so much heartache. It also highlighted our financial vulnerability.
Last year, at the height of the COVID-19 crisis, we found ourselves dipping our hands in our savings account a few more times than we were comfortable with. As 2021 closes, we might re-write our usual New Year’s resolution to include financial stability.
People Magazine reported that 73 percent of Americans shared this aspiration for 2021. Even before the pandemic, almost half of the population want the same thing. If you count yourself as one of them, you should pay attention to this article. It will help you accomplish your goal!
Talk with a Financial Advisor
This step will help you realize the gravity of the situation because a financial advisor can help you see your actual economic reality. They will help you assess whether your savings account matches your goals. The question is whether you know your objective.
If that is the case, you do not have to fret because your financial advisor can help you with that. Their work does not end there. They will advise you on how to achieve your goal.
Establishing an Emergency Fund
Most Americans do not have an emergency fund. As a general rule, it should be in a regular savings account because this will allow you easy access to your money. Having one will make you give you peace of mind and will also boost your financial confidence.
Having one will prevent you from incurring a debt if you find yourself in a tight spot, such as a car accident or medical emergency. You should set aside one months’ worth of living expenses to start things. Once you meet this goal, you can save three months’ worth.
You will slowly build your emergency fund until you reach six months’ worth of living expenses. If possible, you should set aside 10-15 percent of your monthly income. Earlier, we mentioned that it is best to put it in a regular savings account, but you can move it into a short-term investment account. Doing this will give you something out of your effort to save money.
Pay Down Debt
If you feel that you are the only one struggling with your finances, you should dispel such thoughts. The pandemic highlighted the financial vulnerability of most Americans. It also compounded our debts. Collectively, we owe $17 billion. Some of us even have school debts and other personal loans.
Our debt often casts a dark cloud over our future. It causes us anxiety, so we need to get rid of it as soon as possible. The first step is to determine how much our debt is and who (or what institution) we owe such an amount because the lender may not just be a bank.
The COVID-19 crisis highlighted the hard truths about life. But we should not bow down to it and allow the pandemic to win. These steps will help you gain back some control of your life.
You can do this by establishing a savings account. There is no better place to do this than Good Neighbors Credit Union because we believe that your success counts as ours. Call us now for more information!