The year 2020 was the year that never was. The seasons were stolen by the hands of a raging pandemic. From Antarctica’s icy plains through the dusty dunes of the Sahara, the world has been convulsed in a state of loss, panic, and a sense of uncertainty. Covid 19 shattered many dreams, dimmed many lights, and diminished many hopes.
The devastating tremors of the pandemic have been felt across all aspects of life. Financial health has been hit hard, and this gloomy season of loss lingers on. There are beams of hope, nevertheless. If the year 2020 was the stolen year, we must strive to make 2021 the recovery and restoration year. Here are ways to improve your financial health in the year 2021.
What is good financial health?
Good financial health means having stability in your personal finances. Some signs of good financial health can include cash flow that is growing, returns on investments, a steady flow of income coming in, and changes in your expenses are rare.
7 Tips To Improve Your Financial Health in 2021
- Diversify your income sources
There’s stability in diversifying your sources of income. In a world that has been battered by uncertainty and where bills keep increasing, it is not prudent to continue depending on that one regular monthly paycheck. With recent massive job losses and the collapse of whole industries, it has become evident that diversifying income sources can offer sustenance when the storm hits the shores. At its barest minimum, it would help to turn one’s hobbies, passions and common skills into a business.
Amidst the financial constraints, it is always crucial to stick to your budget. The budget is the most helpful roadmap into achieving financial discipline and will ensure you don’t fall off the cliff in the year 2021. Budgeting is the most critical financial pillar that individuals and organizations choose because it determines how to spend the available resources. When you have drawn that budget, the other vital ingredient is your habitual choice to follow it dutifully.
- Save, Save and Save some more
The pandemic has demonstrated that there will always arise dark moments, days of scarcity and months of hardship. It is important to borrow a leaf and ensure that you have a constant supply for a rainy season. Saving is the surest method of securing the future, and a saving culture can be developed by setting a constant amount deducted periodically and transferred into a savings account. Some checking accounts like Current, offer ways to automatically save money for you.
- Cut your costs
You definitely cannot give what you don’t have. Neither can you save nor spend what you don’t earn. This year, make it a habit to live within your means by not overspending, avoiding impulse buying, and cruising outside your set budget. The bottom line is whenever you start over stretching your expenses to newer territories; you are likely to enter the debt bracket, which is sure signs of financial indiscipline.
Embrace a frugal life by cutting down on the luxury trips, expensive night outs, high-end costly functions, and vacations. You can also lower your monthly bills like your tv, internet, and phone with BillShark.
If you are in debt and struggling to get out there is a light at the end of the tunnel. If you have credit card debt across multiple credit cards you can use a company like Payoff which will consolidate your credit card debt for a simple monthly payment. With medical debt, tax debt or personal loans you can use Curadebt to negotiate the debt on your behalf or consolidate the debt to get affordable payments.
Related: How To Get Out Of Debt
- Invest in a business.
The portfolios of investments in the year 2021 are diverse and increasingly technology-based. Find a business you can invest in and expect good returns. Investing one’s money ensures that one uses available resources to add value to current assets. Start with simple low capital investments and continuously evaluate and review your investment choices. Personal investment brings financial independence, which everybody envies.
Related: How To Build Business Credit
- Cover your future
The realities of tomorrow depend on the investments and efforts of the present. For a secure future, it is vital to plan today. It is time to revive and boost the retirement plan, school fee plan, homeownership plan, health insurance plan and entire family plan. A slight increase in savings towards this end is a gesture towards financial stability in the future.
- Clean up your credit record
The burden of debt and the woes of bad credit are detrimental to financial health. If you have missed payments on your student loans, mortgage, rent, car loans, personal loans if you have high credit card debt, foreclosures, or bankruptcies you most likely have bad credit. You can fix your credit yourself or hire a credit repair company.
What can you do each month that will improve your financial health?
The best thing you can do each month that will improve your financial health is to create a monthly budget sheet. A great tool that can help you keep track from your budget and expenses is Quicken, quickbooks, pocketguard.
Every month you should know how much money you’re bringing in, how much is going out for expenses and what you have left over. The money that you have left over should be going to an emergency plan. You should always have at least 3 months of rent and expenses put aside in case someone loses a job or gets injured.
Financial wellbeing in 2021 is a bag of mixed choices. Every individual requires a unique blend to suit his or her circumstances. Go ahead and make your move. 2020 was a stolen year. 2021 is the year of recovery!
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