There are positive financial changes you can make now to help you manage your finances better for the year. This can be a big help especially with everyone coming from a very challenging year. The health crisis that is still ravaging several countries challenged even the ones who saved up for emergency situations.
As soon as the hospitals were slowly filling up, people were asked to stay home to lower the infection rate. Once that happened, everything changed in an instant. Consumer habits changed, businesses operations were disrupted, and the economy was experiencing a sharp change since it is driven by consumer purchases as shared by the The Conversation site.
This is just one of the reasons why you need to find a way to make positive financial changes in the way you manage your money. Of course, you also want to take this on to help you get back on track. There is a good chance that at the top of the year last year, you had a lot of plans. But those had to take a side step as you focused on getting through the pandemic.
Now that the economy is slowly getting back up on its feet, you need to take the opportunity to improve your finances as well. This is a good time to revisit your strategy and identify changes you can make to put your finances back on track. This is as good a time as any to get started. Here are a few things to consider when you want to start.
Pin down a financial goal
Positive financial changes start with identifying and deciding on what your financial goal is. Your long-term goals should stay the same but your short-term goals can consistently change. But they should always get you closer to your long-term objectives. It is not surprising to lose track of your goals when you shifted your focus on surviving and getting through the health crisis.
But now that you are trying to get back on track, you have to again define what your financial goals are. It can be saving for a downpayment on a house, reaching a specific dollar amount with your emergency fund, or even getting your children’s 529 plan started out. It is important that you have a goal to aim for so you can pivot your way back into track.
If your plan is to get started again in setting money aside to buy your dream house, look at where you need to make changes in your budget. Do you need to add more to that fund every month? Can your income cover that additional amount? The good thing with goal setting is that it helps get the conversation started and pushes you in the right direction.
Identify the best way to pay down debt
It is not surprising to accumulate debt over the past few months as you did your best to deal with the health crisis. This is especially true if you did not have any form of emergency fund to rely on to cover unexpected shortage in your budget. If you are now back on track with your income or slowly getting to where you were before, debt payment needs to be priority.
This is one of the positive financial changes to keep in mind because if you leave it unchecked, you can end up paying huge amounts over to interest and other fees alone. There are a few strategies to choose from to help you put some sense of order in your debt repayment strategy. One of them is debt consolidation.
It basically helps you combine your debt payments under one account. Once you do this, you will have an easier time staying on top of your payments. You only have to monitor one payment amount with one due date. It is also possible to focus on either the account with the smallest balance or the one with the highest interest rate. Whatever you choose should depend on your current financial status and not what other people think.
Look for income opportunities
Positive financial changes should also include a proactive approach in getting your income back up to what it was before or even more. It could be as simple as reaching out to your previous employer to check if they are hiring people back into the company. There is a good chance that if they are hiring again, they would prioritize former employees they had to let go because of the pandemic.
You can also explore taking up a side hustle. Forbes shares that about 35% of the workforce had a side hustle even before the pandemic. This can help you get started in bringing back income into your budget. If you already have a job, a side hustle can increase the amount you bring in at the end of the day. This can help you lower down your debt obligations that could have ballooned at the height of the health crisis.
A side hustle can be a result of an income-positive hobby as well. This is where you use your hobby and find a way to earn money off from it. It could be that your love for photography could lead you to earn passive income once you start submitting stock photos online. If you love baking, you can bake-on-demand for family and friends over weekends so you can earn some extra money. One thing great about this is that you get to do something you love while improving your finances.
Positive financial changes means being better than you
You might start to feel that you need to do better than everyone you know. This sense of being ahead of others is not what determines your success. To start off, you cannot compare yourself to others. You do not know what they went through to get to where they are now. They have their own set of struggles and challenges they went through to succeed.
If you keep comparing yourself to other successful people, you will never be happy. You can look at them and take their results as an inspiration to be better. But your journey will be different from them. Just because you see your neighbor pulling up in a brand new SUV does not mean you should do the same and get a new car as well.
For all you know, they will be using it for business. It could also have been given by a family relative. If you want to be better than someone, be better than who you were in the past. Create a better version of yourself. The people around you can be an inspiration to do better but always base your progress in self improvement and not on the lives of other people.
Hire a financial adviser
One of the financial changes you can make is to hire and get the services of a financial adviser. Sure, you can try to do everything on your own but it is better to have a professional in your corner to help minimize your challenges and mistakes. This is better than trying to be a weekend warrior when it comes to your investments and financial future.
It is not easy to quickly turn your finances around but there are positive financial changes you can do today to get back on the right track.