The year 2020 has tested us from every aspect. Be it the financial sector, health sector, or our survival strategy; the COVID-19 has assessed us in every way.
The pandemic has forced us to rethink our lifestyle. With millions of job losses and death toll, we have surrendered before the corona pandemic in 2020.
But there is no time to lament or lose our hope. There is still now a full month remaining in 2020. We have ample time to rectify the financial mistakes we have made in the past 10 months before 2021 knocks on our door.
We must remember a point:
Develop success from failures. – Dale Carnegie.
Take a look at the 3 grave financial mistakes we have done in 2020 and how we can rectify them before 2021.
1. You need to take care of your personal finances from now on
Taking care of personal finances means from now on you have to create a budget for yourself, along with it, the need of the hour is an Emergency Fund.
The year 2020 has taught us, most of the Americans who have financially suffered from the pandemic, are used to living the paycheck to paycheck life.
So, take a look at what you should do in the personal finance sector before the new year arrives.
A. Chalk out a monthly budget for yourself
You must try to create a monthly budget for yourself before 2021 arrives. In the monthly budget, you must stipulate your monthly earning, monthly spending, and how much money you can save. A person who dedicatedly follows the budget usually can remain out of any financial danger.
B. Immediately start an ‘Emergency Savings Fund’
Other than the personal budget, the COVID-19 has taught us, you need an ‘Emergency Savings Fund’ as well to sustain yourself in a financial emergency.
You need to save 3 months to 6 months of savings in the Emergency Savings Fund. So, during any financial emergency, you don’t have to take any irrational decisions.
Apply these 2 personal finance tips so that the new year can be peaceful for you.
2. You should try to eliminate debt from your life
Debt is another financial mistake Americans are used to living with and from which Americans should take a lesson now.
After millions of job losses, debt, especially the unsecured debt has turned into a major problem for the American.
You can follow these simple steps to tackle the problem of the unsecured debt burden.
- Debt management plan
With the debt management plan, the representatives of the debt management firm will work with your creditors. The representatives will convince your creditors to reduce the interest rates on your debts to reduce the monthly payment of your credit card debts.
With the debt management plan, you can get 3 years to 5 years to pay off your monthly payment in a favorable condition.
- Balance transfer card
For your credit card debts, using the balance transfer card will be another great idea for you. You can get a 0% interest rate balance transfer card where for a promotional period of 12 to 18 months, you can repay your outstanding balances without paying any interest rate.
This is the benefit of using a balance transfer card.
Not only unsecured debt, if you have taken out any payday loan in an emergency, try to solve that debt problem too with how to eliminate payday loan debt.
So, when you have debt with high-interest rates in such disastrous financial conditions, never make any delay with it. Apply these debt payment strategies so that you can start 2021 in a tension-free way.
3. You must take the responsible decision regarding your investments
It was very normal for Americans to get panicked by the sudden loss they have faced in their investment portfolio. Many among us have decided to panic-selling the investment during the pandemic.
But this is not at all a good decision. You should wait patiently till the year passes by and for the arrival of 2021. There are already signs that the upcoming year won’t make you disappointed in the investment sector.
Instead of panic-selling the investment in a stressful way, think about a long-term investment goal for you.
Thus, the new year may give you a chance to rectify the mistakes that you have made in a panicked way in 2020.
Conclusion
More than anything, 2020 has made you an experienced person financially. 2020 has taught us that you cannot handle the personal finance sector casually anymore.
In your financial planning, you have to be focused on the budget and emergency fund sector, you have to handle your debt problem professionally as well as have to take panic-free investment decisions.
If you can rectify your financial mistakes by this year, 2021 may welcome you in a new way.
You are never too old to set another goal or to dream a new dream.
Author Bio: Catherine Burke is a financial writer for online payday loan consolidation. She provides information on successful cash loans and payday loan consolidation to help people get over a difficult patch. She lives in Kansas and has earned a frame in the matter of payday loans.