2020 was a tough year for everyone, particularly as it pertains to money. You might be wondering what you can do to recover financially. There are some simple steps you can take to get your finances in order and begin to rebuild your savings. These tips can help you feel more secure and put you on the path to financial stability after the chaos of 2020.
- Start Rebuilding Your Savings
Your savings are key to rebuilding your financial security. You may have had to dip into your reserves to get through the last couple of years. Now is the time to start rebuilding your nest egg. An easy way to do this is to set up direct deposit for your paycheck. Have part of your salary go into a separate savings account. After a few months you will begin to see this account grow. Your overall goal should be to have enough money in case you run into a crisis situation, such as an injury, illness or loss of a job. You’ll feel much more secure knowing you have this money to fall back on in tough times.
- Focus on Investing
Investing is where your money will truly grow. If you currently have an investment account, make sure you are adding to it each month. If you have never invested, do some research and consider reaching out to a certified financial planner. Letting your money sit in a savings account won’t do much for you over the long-term. An investment account, if properly managed, can help you dramatically grow your money.
- Take Out a Loan
There are many reasons to take out a loan and it may make sense for you to consider this option right now. If your company has been struggling, you may want to research business loans. If you are struggling with vehicle costs, debt consolidation or emergency expenses, a loan may also be the best choice.
- Prepare a Budget
A budget is crucial to having solid finances. Financial experts recommend that you cover your necessary expenses in full and some of your desired expenses, as well as put some money away for emergencies. Keep track of your spending for a few months to get an idea of the current state of your finances. Then take time to create a budget. Make a commitment to stick to this plan to rebuild no matter what and make sure that everyone in your household is on board.
- Ask For a Raise
If you are unable to live on what you currently earn, now might be a good time to ask for a raise. While many businesses are still struggling after the past couple of years and your employer may not have the available funds, you will never know unless you ask. Do your research before you meet with your boss. Know what you are worth and what workers who do your job generally make in your area. When you meet with your boss or manager, be thoughtful about how you address the issue. Speak about why you think you deserve a raise. You may want to bring up any special projects you have completed over the last year. Be confident, but be prepared to be gracious if the answer is no. You can always ask again at a later date.
- Spend Less Than You Earn Each Month
This tip is one of the most important ones to follow. Cut costs where necessary so that you make less than you earn. This doesn’t necessarily mean that you should settle for a completely different lifestyle, although you should do what you need to do to make sure your finances are secure. Small changes add up to a big difference. Consider cutting out your daily coffee or weekly manicure and you can save hundreds of dollars each year that can then be put into savings.
The last few years have been a scary time financially, but there are simple things you can do to rebuild your monetary stability. Try a few of these tips today.
