This has been an extremely difficult year for folks across the globe. Now with 2020 coming to a close, there are some precautions that folks can take to avoid financial trouble in the coming year. Generally speaking, it’s best to spend responsibly and get rid of expensive services or memberships that are not used. It is also essential to think long-term despite the uncertainty of what is currently happening.
5 actionable strategies
Here are some suggestions from financial experts for riding out the coming year:
- More emergency savings: This account probably doesn’t ever have enough in it, but make a concerted effort to do better. Some financial experts suggest having a year’s worth of expenses in this account rather than the usual three to six months.
- Reevaluate your debt: Carrying debt on high-interest credit cards is acceptable in the short term if they are likely to be paid off, but it’s smart to switch the balance to a low-interest card. It may also be time to refinance the mortgage since rates are at a historic low.
- Update the budget: These are unprecedented times, so the old budget may not make sense. Perhaps earmark money spent on transportation and eating out (whether it was lunch at work or dinner with friends) towards saving to create a larger financial reserve.
- Invest more: There is a lot of instability in the current stock market (which will eventually rebound), but maybe focus on retirement savings or other investment opportunities.
- Invest in businesses and people: Support favorite local businesses, restaurants/bars or services that add much to your community. Volunteer if it is safe to do so. Donate food, protective equipment and goods if that makes more sense.
Filing bankruptcy offers protections
If these suggestions come too late for you (or things don’t go according to plan), many in Wisconsin find it helpful to file bankruptcy during these difficult times. Debt forgiveness can go a long way towards helping individuals and families work their way back to the life they had before this current crisis.