What are we supposed to learn from this covid year financially? Perhaps we have so many lessons that we become overwhelmed..
It is always helpful to have savings. But that’s given advice for the millions of people who didn’t and won’t be able to for a long time — and for the plenty of people who did and still ran out of money anyway.
One thing is for sure: This past year changed everyone’s outlook on their personal finances and their security in general. And that must have taught us something.
To get a better sense of what we may look back fand there are financial experts who have their own ideas of what could have been done right.
Here are few concrete ideas about personal finance from wealth managers.
Understand where your money is.
Many people are not sure whether they had private or government student loans or what the interest rate was. They didn’t know how much money was on their credit card or what that interest rate was, either. When everything is fine, that may not seem like a big deal, but when you lose your job, those details really matter.
It is important to know your savings just in time for the economy to implode. you need to weite everything down. Make a spreadsheet of expected income, bills, and what ccould be paid when. Doing the math helped me realize I wasn’t quite as broke as I felt as long as I kept track of everything and stuck to the plan.
Figure out where to get help.
Anyone who says they got through this year under their own steam is probably lying or in denial. We all had to lean on someone — a family member who provided free child care, a landlord who offered a break on rent, a friend who gave useful financial advice. Asking for help is a humbling experience, but it also forces us to kick the tires on our support networks.
For author and financial educator Eugenié George, seeking support meant finding financial mentors. This past year, some of George’s older family members experienced health problems, and it dawned on her that she will be responsible for caring for them as they age. “At first, I was freaking out,” she says.
But then she realized she could seek guidance — particularly from other personal-finance bloggers in similar situations. “Finding financial mentors has really helped my anxiety,” she says.
Learn how to sit with a tough situation.
Our situation demands that we sit in this in-between space of knowing that we aren’t where we want to be, which is a tough thing when we are emotionally taxed and feeling overwhelmed.
Instead of hitting your head against a wall or despairing that things will never get better, focus on what you need in the moment. It’s important to have a picture of what you want long term but also to have perspective,” she says. In our case, the opportunities to get what we want are not here right now. So in the meantime, we have to wait and take care of ourselves so we’ll be ready when the time comes.
Know your extra expenses.
How much does it cost to support yourself if you get rid of all the extras? know what that number is for yourself and how to reach it — it’s cutting out travel, eating out, streaming services, any frills
This is a good time to figure out that amount — after all, you probably aren’t going out to dinner much or taking fancy vacations. It’s also helpful when you’re planning for the worst.
If you’re worried about your job, you could drop down to your extra budget for a little while to conserve your funds. Hopefully, you never actually need to live there, but knowing you can should give you peace of mind.
Reevaluate your spending priorities.
“Before the pandemic, we had certain spending habits that we didn’t even think about . What we thought of as self-care routines, like going to the nail salon or getting my hair done, were actually just a way for us to take time for ourselves.
When the world does eventually reopen, WE Need to be more careful about what she adds back into her life. For instance, we really might miss workout classes — the online videos just aren’t the same — and travel. But do we need to get her hair professionally dyed three times a year ?
Once people have more options to spend money again, I hope they don’t just jump back into what they were doing before she says.
Be kind to yourself.
It’s been impossible to make plans for anything this year, and the first few months of 2021 won’t be much better.
So cut yourself some slack and remember that it’s healthy to occasionally blow money on dumb, frivolous stuff these days, too.