Managing finances in a pandemic economy
The COVID-19 pandemic has touched nearly every aspect of our lives, from the way people spend time together to the way they work, to how we make money and plan for the future. Here are 5 tips to managing your finances during this unprecedented time.
Every business and industry has been impacted in the wake of COVID, from startups to trillion-dollar organizations. The pandemic quickly shook things up and left businesses reeling, unprepared to handle the size and scope of the problem.
Millions continue to lose their income sources, leaving families without essentials, including job-sponsored health insurance. Homelessness is on the rise, with many taking to living in their cars and campers just to get by.
Meanwhile, frontline workers heroically care for people in our health care centers and retail stores, but are still not earning enough to adequately mirror their efforts. The proposed increase in the federal minimum wage to $15 an hour may help some, but critics say it still falls short of solving poverty and could cost jobs.
5 financial goals for everyone
It’s not all doom and gloom right now, though. During tough times especially, it’s imperative to remember that those who come out the other side faring well are often those who have created smart financial goals. Anyone can take control of their financial status by following a few key strategies.
“… saving money isn’t about avoiding worry. It’s about thinking ahead and anticipating that at some point, you might fall on hard times.”
1. Create tax shelters for your money
Every dime you earn is counted by the Internal Revenue Service (IRS). If you want to get the most out of your money, you must think of ways to put funds into a tax-free account.
One great way to do this is by using your HSA. In 2021, you can stash as much as $3,600 if you’re utilizing it as an individual or $7,200 for a family. And of course, your funds roll over year-after-year so you can do this annually and build up a pretty significant nest egg.
2. Maintain a good credit score
If you want to pay less in fees for personal loans (home, car, credit cards, and more) you must maintain a good credit card score. Keep all your bills paid early or on time. Stick with credit cards that offer generous cashback offers, which will help you to pay down debt faster. Avoid taking out high-interest credit cards or taking out student loans which will reduce your income drastically.
3. Increase your investments
Instead of spending your hard-earned money on quick gratification items and consumerism, invest in yourself, even if it’s a few dollars here and there. Consider investing in smaller stocks of promising startups in growing industries like energy, healthcare, and automation.
4. Invest in yourself
One of the best ways to increase your value and potential earnings is to get some education and training. Learn new things and work this into your career goals. Look for industries that offer the highest growth possibility and focus on high-earning jobs there.
An easy way to see where you should be learning is by reviewing career websites and checking out the number of jobs available by higher salary ranges.
5. Build a savings account of at least a month’s salary
A survey of more than 2,000 Americans revealed that one in three Generation Xers and Millennials were not worried about saving for the future. However, the way we see it, saving money isn’t about avoiding worry. It’s about thinking ahead and anticipating that at some point, you might fall on hard times. Better to be safe than sorry and able to rely on an emergency fund for essential expenses.
If you’re currently struggling to pay your bills, rest assured, better times are ahead. The second wave of stimulus checks are in the mail, and millions have already been vaccinated. All this to say that the economy will see an upswing sooner than later.
What does the future bring?
In the midst of a slow recovery from COVID-19’s far-reaching grasp, it’s become a waiting game for the economy to bounce back. The United States is sensing hope as a little more than half of the 22 million workers laid off during the worst of the pandemic have regained employment. We have a newly elected President and the economy is getting the attention it deserves. Another set of stimulus checks is in the works.
Plan your finances carefully, be smart with your money, and hope for the best! We’ve got this.