Four Tips to Help You Get Your Finances Back on Track Post-COVIDWritten by Carly Simon-Gersuk
Let’s be honest, 2020 was a hard financial year for most people. Many companies had to layoff or furlough their employees, which led to financial hardships for people such as struggling to pay their bills. Now as the economy begins to slowly reopen, those without a job or with reduced hours are finding themselves back working or seeking a new place of employment.
We unfortunately cannot go back and undo parts of 2020, but moving forward in 2021 it is time to get reorganized and refocused. Here are 4 tips to help you get your finances back on track post-COVID.
1.Update your budget
Your financial income and expenses likely fluctuated in the past year. In past blogs we have discussed ways to start and stick to your budget, and now it is important to note that you also need to adjust your budget as time goes on. Are there things you cut that can be completely eliminated? Are there expenses that have come up that you need to allocate more funds toward? By reassessing your budget you can move funds to make sure your essentials expenses are covered - things like your rent, food, utilities and insurance. Additionally, the demand for working remotely may have also adjusted your budget. Maybe you need to pay more for better internet services, the price of childcare has decreased or your vacation fund is overflowing. So if you have not already, update your budget.
2.Secure your incomes
To get your finances on track, you need to secure all your incomes. Make sure your paychecks are on time; check to see if you qualify for any additional aid and make sure that you receive it timely; and look at any part time jobs or side hustles that have been boosting your income. Knowing how much you are actually making will help you maintain financial stability as you refrain from overspending, pay off debt from COVID or pre-COVID, and allocate extra income toward investments, savings or even your entertainment budget.
3.Plan to pay off your debts
During COVID the government, banks and various lenders created deferral programs. These programs put a pause on payments and interests on things such as student loans, mortgage and rent for people who could not pay them. Now as you adjust your budget and understand your income, you need to understand the terms on your loans and know exactly what payments will be expected as deferment ends. Prioritize which payments will need to be paid in larger quantities and how often. Additionally, look at the terms and conditions - you may be able to break up payments into installments so that you will not massively affect your budget and other financial obligations.
If you are not already, start saving money! A lesson to take away from COVID, is that there are a lot of financial uncertainties that can arise within months, even days. In the event that the economy shuts back down, having additional funds that you can dip into can help you stay on track. Any amount, even a few dollars a month, can go a long way. Start working on a savings plan that works for you. Do not plan on giving up things but look closely at your budget and notice where you can cut back. There are also various tools that can help you save without even realizing it. For instance, apps can round up your payments and put your spare change into a savings account.
Financial priorities fluctuate and so will your need to adapt your expenses to efficiently pay bills. Be realistic with your finances as you plan for the end of COVID. We do not know when things may return to a sense of normalcy or what to expect, but it is best to take financial steps now to be prepared for your financial future.
Written by Carly Simon-Gersuk