It’s nearly the end of another year — a life-changing, stressful, faith-testing hell of a year. For so many, a lot of that stress has manifested because of money, like having to decide whether or not you should pay the water bill or put a hot meal on the table for your kids. Maybe you lost your job. Perhaps you had to cut hours to spend more time with your children as they start virtual learning. Maybe the economic downturn split your investment account in half. Or, maybe you got sick.
Millions of Americans are struggling right now. According to a CNBC study, 14%, or ~46 million people, have wiped out their savings accounts. Those aged 25–34 have fared worse — on average 26% have depleted their savings.
With the winter months upon us, my heart is with those unable to provide a warm home, clothes, or meals for their families. While the poverty crisis is not a new concept, so many more of our friends, family, and neighbors are struggling to make ends meet. Maybe you are one of those families.
Therefore, I decided to write about a few money moves you should make now if you are stressed about money.
1-Snapshot your personal financial situation The number one step to understanding your money situation is to snapshot your financial situation. This is how you determine if you need to make changes.
First, create a snapshot of your current account balances. Next, write down what you regularly have going into and leaving your accounts- like bills and subscriptions. Then, write out your debts. Having these written out as a snapshot helps you conceptualize your situation so you can make the best financial decisions.
2-Re-evaluate the way you spend your money
Even if your above calculations have you coming out on top, please keep reading. The more bills or debts you eliminate gives you more money to divert to savings, giving, traveling, passion projects, or starting that business you have been thinking about for years.
Consider where your money is going. Should you keep or cancel?
Video/Movie Subscriptions. Do you have accounts at Netflix, Hulu, Disney Plus, and Apple TV? Ask yourself why. How often do you use your video/tv subscriptions? Calculate how much you would save in a year if you canceled a couple of them.
Other Subscriptions/Memberships. Do you pay for other subscriptions like Audible, Apple Music, or a workout plan/gym membership? It is easy to forget we are paying for the many subscriptions we have. Oftentimes, it all starts out with a free trial that turns into a paying service we forget about. Normally, you don’t get reminders. A couple of tips-Obtain a membership from your local library. Many now offer free apps for reading ebooks and magazines, watching movies, and listening to music all for free. Further, consider your gym membership benefit. Since the pandemic, have you been able to go regularly? There are now vast options available online for free workout programs or videos. Or, check your local Facebook community groups for free running groups or workout sessions at the local park.
Insurance. It is always a best practice to check insurance rates periodically to see if another company can give you a better rate. When was the last time you got a new quote?
Refinance your mortgage. Do you know your mortgage rate? Rates are currently at a record low. The average 30 year fixed rate is currently 3% APR. If your current rate is much higher you should consider reaching out to your banker to review your options. It might save you a considerable amount of money.
3-Create a budget Now that you have a good idea of where you stand financially, it is time to put a plan in place–a budget. A budget is a simple list of income and expenditures. In this article, I go into detail about how to prepare your budget. You can also find many templates online to help you create your own.
You can start by setting a monthly budget, but be sure to review your budget weekly to ensure you are staying on track and to reinvigorate your focus. It is easy to fall off track. There are many planners that incorporate a budgeting section to keep it fun and at top of mind.
4-Start a side hustle There are many ways to earn a little extra cash these days. Do you like to make arts and crafts? Maybe you make jewelry as a hobby or build fancy birdhouses. You can start an account at Etsy or sell your items on Ebay.
Or, maybe you went through a shopping craze period. It’s okay – I did too. Our homes are full of stuff we don’t use anymore. All this stuff you have been holding onto for so long can make you some money. Put it all in a pile, take some good pictures, list it, and make some cash.
Have you ever wanted to write a book? You can. Write your short stories, a book of poems, novel, or even create a customized planner and sell them. In this article, I write about how I self-published my novel through Amazon’s KDP Program.
5-Save money automatically It is easier to save money if it is automatic, and you never see it go into your checking account. If you work for a large company you can change your direct deposit amounts and redirect a portion of your paycheck to another account. If you work with a smaller company, check with your HR professional to set this up.
In Conclusion You now have a solid foundation to build on. With discipline and a good mindset, you can be well on your way to establishing good money habits to create a successful financial future. Please follow me on Instagram @lauraebaize for more tips and strategies.