For many of us, 2020 has felt like a post-apocalyptic, bad movie. It’s so catastrophic in many ways. Many people lost their jobs, and a lot more are dealing with financial issues. The coronavirus pandemic has badly affected our livelihoods. Some lost income due to pay cuts, reduced hours and layoffs. Others had to use their retirement funds and hard-earned emergency money for groceries, child care, rent and health expenses.
The big question now is, where do we go from here? Hopefully, we can all bounce back with the reopening of the economy. Below are some of the principles that can help us get back on track.
- Invest in the stock market.
Put your savings to work by diversifying your portfolio. Capitalize on compound growth. Think about it. If you save $6,000 each year for more than 30 years, and then keep it in the bank, by the end of three decades, you have $180,000. Furthermore, if you’re contributing to a 401K plan at work, you can secure your retirement. For those who don’t have that, open an IRA, or individual retirement account. This gives you the benefit of growing your retirement savings, tax-deferred.
- Contemplate on all the things that you lost.
Have you heard about Warren Buffett, the legendary investor? What’s really amazing about him is that he made 99% of his $86 billion fortune after he turned 50 years old. You might be wondering how he did it. He systematically invested his savings in the stock market, and diligently spent less than he earned. With proper budgeting, financial progress is possible.
- Review your spending and saving.
If there’s ever a silver lining in this situation, it’s the social distancing rules. These gave people the opportunity to assess the way we allocate our funds. Do you think you really need that $200 each month on a gym membership or that $15 streaming service? Here’s a simple method made popular by Elizabeth Warren. 50% of our incomes must go to needs, while 30% to non-essentials. Then, the remaining 20% goes to debt payments and savings. Basically, spend less on Instagram-worthy stuff, and more on those that will help you establish long-term financial independence.
- Leverage on assistance.
Look into what assistance might apply to you. Leverage on it. If possible, try giving your credit card company or student loan lender a call. Ask if they can provide temporary relief.
- Look for an accountability partner.
Establish a good support system. Partners and friends are good people to learn on, most especially when you’re starting to rebuild your finances. Once you have set a budget plan and goals to hit, looking for confidants to hold you accountable can help you stay right on track. Call your loved ones. Share what you are working on, and ask for their support.
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