Financial Fitness During COVID-19
The beginning of a new year is always a good time to review your finances. In 2020, the coronavirus pandemic threw us all a major curveball, affecting our livelihoods, our social life, our physical and mental wellbeing and our financial health. Here are some tips on how to review your family’s financial fitness as we begin 2021:
Did you lose your job or were you furloughed? Now is the time to review how much money is coming into your household and compare it to your monthly expenses. Make a list of essentials like your mortgage payment, utilities, food and medicine. If you cannot pay your bills, look for government and community resources that can help.
Pay down debt
If you are staying home more than normal due to COVID concerns and are finding yourself with extra cash on hand, pay down high interest debt. Take a look at credit card debt, student loans, car payments and financial obligations. Consolidate high interest cards to get a lower interest rate and pay down your highest interest debt first.
If you are working from home, eating out less and hitting the home gym, your daily expenses are probably reduced. Take the money that you save on commuting, gym memberships and happy hour at the local watering hole and turn that into an emergency fund. Start by delegating a percentage of your pay to a savings account. It is a good practice to have three to six months of living expenses stashed away.
Save on your mortgage
Lower interest rates introduced during the pandemic mean that mortgage rates have gone down. Check with your banker and run the numbers to see if refinancing makes sense for you and if it will save you money in the long run.
Did you get married or divorced in the past year? Did you lose a loved one or is there a new addition to the family? The beginning of the year is the perfect time to take a fresh look at your beneficiaries. Review insurance policies, investments and bank accounts to make sure beneficiaries are up to date.
Review car insurance
If your car is sitting idle in the driveway because you are working from home or are furloughed, contact your car insurance company. You may be eligible for a reduced rate or a rebate since you are driving less. Take the time now to shop around with other car insurance companies to see if any offer a pay-by-mile or reduced rate offer.
Beware of scams
Unfortunately, pandemics are a type of national emergency that scammers will take advantage of to prey on people's fears. Before accepting any offers of help to pay your mortgage or your bills, or to receive assistance filling out forms for government resources, do your due diligence. A simple internet search can help you figure out if the help that is being offered is legitimate.
The stock market had a wild ride in 2020 due to coronavirus. Review your investments and how they are distributed over stocks, bonds and cash. Make sure they are still aligned with your long-term goals. If not, it is time to rebalance.
Review will and estate plans
The COVID-19 crisis is a sobering reminder to make sure your affairs are in order in case you are incapacitated or pass away. Make sure you have a will and an estate plan to ensure your loved ones are protected, and your assets are distributed as you wish.
Julie Landry Laviolette is a freelance writer who specializes in personal finance, health and living well. Find her on Twitter at @JulieLavio.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Ameris Bank does not endorse nor is affiliated with the companies listed in this article.