The COVID-19 pandemic has left many in a financial ruin (or at least in less-than-ideal financial circumstances). People are reeling from what the shutdown and quarantines did to the economy and to their personal wealth. It’s important, maybe now more than ever, to make sure your finances are on track to meet your future goals.
It’s is a good thing that businesses and travel have started to open back up. People are staring to get their lives back. Life is beginning to return to pre-Covid19 normal as vaccines are rolling out. With all this taking place, it brings additional incentive to look at your finances and see if you need to make adjustments to stay on track toward your goals. There is no better time than now to get started.
There are many factors to consider with this. That’s why so many cannot and do not manage their finances well. It simply can be a daunting task to know where to start and how to plan things out well.
It’s not overstating it to say that for many, finances can be one of the greatest causes of stress and anxiety. However, there are some simple tasks that can help get you started. Here are just a few easy ways for you to make sure your finances are on the path to success.
Monitor Your Credit Score
Your credit score is an important factor to monitor. This is especially true if you have lofty short or long-term financial goals. It is commonly used by lenders and other businesses to determine if you are eligible for big purchases like a home or car.
The home buying process is one where it’s important to consider and research your credit score. That is because home loans have varying minimum credit score requirements. Checking your score is free if done annually and won’t negatively impact your score. Using simple credit monitoring apps, or even using your bank account app in some cases, is a great first step to better understanding your financial situation.
If your score is in good shape, you’ll have peace of mind of knowing that’s one less factor that can be used against you when securing a loan. However, you may find glaring problems such as credit card debt or too many open credit cards. You may have lost sight of that if you were using credit to manage through the pandemic.
Make it a priority to fix these issues as quickly as possible. You won’t be able to reach your long-term financial goals if you don’t.
Related Content: 3 Tips to Boost Your Credit Score Before Getting a Loan
Reassess Your Financial Goals
I mentioned a lot about goals in the last section. The question we need to ask is what are your financial goals? Have you thought them through recently? If not, it may be time to reassess and maybe change your financial goals.
Setting financial goals can include anything from sticking to a budget, to paying off a major debt or saving for retirement. When coming up with what financial goals best suit you, there are several factors to consider. They include your:
- Current savings
- Retirement plan
- Long-term goals such as buying a home or starting a family
- Debts
- Current budget
Organizing and understanding your new goals will help keep you on track. Your financial life will come more into focus and leave you feeling more in control. Plus, it gives you something concrete to come back to and reassess if you start to fall short or new priorities arise.
The goal-setting process may be overwhelming in your mind. Where do you even start? The good news is there is a simple process for this that you can learn. Setting goals isn’t hard but does take some practice to create them in a way that leads you to reach them. Click on the link below to learn how to do this and get a template that can help you.
Related Content: How to Set Goals: Make Them SMART
Minimize Your Spending
Once you’ve set your money goals, it may be a good idea to evaluate your spending. If you’re struggling to pay bills, minimizing your spending on non-essentials, such as streaming services or takeout, will help you get back on track quicker. Again, those are things that you may have fallen into paying for as you were stuck in quarantine the last year.
Try out different spending limit strategies to see what works best for you and your needs. Even if you simply cancel an unused streaming service or cut back on coffee trips, this can make a huge difference in the long-term. Although this doesn’t need to be a permanent solution, it is certainly helpful when you feel your finances have fallen off the wagon.
It is challenging to evaluate what you have been spending money on if you do not have a budget to review. A budget is the #1 tool you can use to get your spending under control. There are many reasons why people don’t budget but so many benefits that come from it.
Related Content: The Ultimate Guide on How to Make the Best Monthly Budget
Save Your Money
Saving your money, whether in a retirement account or emergency fund, is crucial to help you feel prepared and in control of your money. It is the step on which all other financial success is built. You can’t really move forward without it.
After determining a budget for yourself, it should be clear approximately how much you can put into savings on a given month. Try setting a goal for yourself by the end of the year of how much you want to save. Then, create a plan for how you’re going to get there and how much you need to set aside. This will give you a clear vision and focus, which will likely result in achieving your savings goals.
Related Content: Emergency Fund Basics: The Step on Which All Other Success is Built
While not every financial goal is easy to achieve, setting yourself on the right path doesn’t have to be impossible. With just a few simple steps, you can gain the confidence to take on bigger and more challenging financial goals as you go. So, now it’s time to get after your finances and put them on the track toward financial growth and prosperity.
Leave a Comment or Answer a Question Below: How did the pandemic hit your finances? What did you do to manage through it and how are you recovering from it?
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