According to a National Endowment for Financial Education survey, over four in five (84%) Americans say the COVID-19 pandemic is causing stress on their personal finances—a statistic that's unfortunately not at all surprising.
Many have had to adapt and adopt new or stricter financial practices in order to stay afloat. And though resolutions for the new year are often made in January, we thought spring was a perfect time to reassess and recalculate which financial resolutions you should stick with for 2021 and beyond.
If we've been taught any financial lesson during the pandemic, it's that building an emergency fund is essential. According to a recent Bankrate Financial Security Index, only 39% of Americans surveyed say they could comfortably cover an unexpected expense of $1,000. If you're in a position like many are at the moment and live paycheck to paycheck, don't get overwhelmed when thinking about starting to save. Start small! Putting away $10 here and $50 there will add up faster than you realize. Reassess if your current budget still works for you and be sure to prioritize setting some funds aside before you start spending elsewhere.
Keep that side hustle going strong. An impressive number of people have embraced their talents and passions in the form of a side gig in the last year. In addition to the more than 57 million Americans who freelanced last year, a new study from Upwork found two million more Americans have started freelancing since. Though some have embarked on this type of career path out of necessity to cover necessary expenses, some also saw the pandemic as a sign to finally take that leap of faith they've always wanted to. Whatever reason you had for starting your side work, consider keeping it up. You'll not only continue to earn extra income and hone your skills, it may end up becoming your full-time gig down the road.
Place more importance on credit monitoring. Credit card fraud amounts for the highest percentage of identity theft, with employment or tax-related fraud coming in second. Federal Trade Commission research found as many as one in four people have an error on their report that could affect their credit score, so it's best to continue to regularly check at least one of your credit reports regularly. Don't wait until there's suspected fraud to get your ducks in a row here. (Speaking from experience on this one, folks.)
Eliminate unnecessary expenses. Many people have found they've saved extra money during the pandemic from cutting back on their normal spending. Whether it's from not dining out often, forgoing that salon service you regularly enjoyed, or saving on gas from not driving to the office every single weekday, assess what expenses you think should be permanently eliminated as a return to "normalcy" beckons. Perhaps you've realized you enjoy doing your own nails at home, or are more productive in a home office and would like a job that allows you to work remotely. This is a great time to set intentions for your financial future.
Though much remains unpredictable at this point, taking initiative with the financial things you CAN control not only offers a sense of stability, but also puts you on an increasingly stress-free track for the days ahead.
Written by Sarah Suydam, Managing Editor for West Michigan Woman.
This article originally appeared in the Apr/May 2021 issue of West Michigan Woman.