The year has been tough with the pandemic hitting the whole world but there are a few money moves you can do to end it on a high note. You might still be trying to recover from being let go from work. If your job allows you to work from home, this might be something you are doing right now. You could also be on furlough and waiting to be called back up again.
The health crisis has affected a lot of people in a number of different ways. But one thing is certain, your finances were impacted in one way or another. The pandemic forced a lot of states to put down stay-at-home orders. This changed a lot of
Money moves to end the year right
There are a few financial maneuvers you can look into to help you end the current year on a high note. It can give you the edge you need to manage your finances better for the coming year.
Adjust your budget to meet current expenses
The health crisis could have pushed your budget into a different trajectory. There is a good chance that it dropped your income sources while driving your expenses up. CNBC shares that early in the year, total household debt went as high as $14 trillion for the first time. If this is the case, you will be looking at debt payments that seem to keep increasing month after month. It would seem like the total balance does not seem to go down.
One thing you can do now is to start making budget adjustments, especially with your expense side. It is a good time to revisit your expenses and identify concrete ways to adjust them down. Can you also identify income opportunities to help you manage your budget better? There could be side hustles you can take up before the year ends.
Cut down your spending
This is perhaps one of the most important money moves you can make before the year ends. The best place to start would be your budget. Take a look at what you spend on and identify specific ways to lower each and every one of them. Going through your expense list can challenge your creativity in living below your means.
There is a good chance that your rent or mortgage payment is at the top of this list. One option you have is to talk to your landlord or lender. Explore ways to possibly lower down your payment. If it means looking for a smaller place to rent, then consider that so you can save money every month. You can also explore a lower interest on your mortgage if your credit score has improved over the years.
Your creativity can also help you lower down your food expenses especially when you choose to prepare and cook your own meals. This is something uniquely different especially if you are not used to preparing your meals. There will be a sharp learning curve but once you get the hang of it, you not only save money on food. You get to serve healthy meals for your family as well.
Prepare your budget for holiday expenses
Around this time of the year, one of the money moves you need to start thinking about is preparing your finances for the holidays. There is no denying the fact that this is one of the most joyous and most expensive times of the year. This is usually the time where you plan your holidays around visits to family and friends coupled with plenty of presents for people that matter to you.
However, this could be one of the most unique holiday celebrations in the past few years. The pandemic could limit your travel and even your gatherings over the holidays. A lot of people will think twice before they even book flights or attend gatherings. But this does not mean that you will not be giving away presents.
It would be a good idea if you can create a holiday list for you to stick to this season. This can help guide you on who to give gifts to and even assign amounts you can spend for each person. Doing this can give you an estimate of how much you will be spending on presents for the holiday.
Start making a list of your goals
As you put together a holiday list, one of the money moves you can add to that is creating a list of what your goals are for next year. You might even refer to this as your new year’s resolution list. It’s usually that time of the year where you lay out what you want to achieve for the year. It is a good strategy to help you focus your mind on reaching your goals.
Money moves to prepare for next year
As you now have a good idea of what you can do to help you end the year right, why not go a step further? You can also start preparing for next year as early as now. Here are a few of the things you can focus on to help you do just that.
Check your retirement goal
The current health crisis could have derailed your retirement plans. For some, it was an easy choice to dip into their retirement fund to help them pay for basic needs. Especially as the CARES act made it a little easier and allowed most Americans to use their retirement savings for their current need. Now that that the economy is slowly improving, it might be a good time to get back on track.
A good place to start is to just put in the amount you were contributing to it before the pandemic hit. You might feel pressured to try and get back all that you have used to get back on track. If you can then go ahead. But the important thing at the moment is to simply start saving up for it again. Over time, you can find ways to put in more for your nest egg.
Put more in your emergency fund
One of the best money moves you can focus on at the start of the year is working on your emergency fund. If there was one thing this pandemic was able to highlight, it was the need to have some financial cushion. A lot of people were caught off guard and for those that did not have any type of reserve fund on standby, it was much more difficult.
If you are just starting to save for emergencies, the best way to begin is by building up the habit. You can do this by setting aside a small, to begin with. As you get used to it, you will soon begin to save for your emergency fund even without thinking much about it. When you get to this point, saving money will become automatic for you. It also helps that TIME shares you essentially decide the amount you need to save for your emergency fund.
Diversify your income source
This is one of the best strategies to help you strengthen your finances at this time. You can start with income-positive hobbies when building up income sources. The good thing about this is that you get to do what you already love doing and getting paid for it. This can also be a great way to open your eyes to options especially when you retire in the future. There are also a number of online side hustles you can consider you can do at your own pace.
There are money moves you can consider doing before the year ends to help you close 2020 on a high note. Take a look at them so you can get a good headstart for the coming new year as well.