The COVID-19 pandemic sent shockwaves through the global economy. And the subsequent uncertainty prompted many of us to take a closer look at our finances. As vaccines roll out and economies show signs of rebounding, you may be looking for ways to focus on your long-term financial goals. If you had to pause on saving, investing or paying off debts, now might be a great time to get back on track.
This piece will offer tips and best practices for overcoming several financial setbacks that may have affected you during the pandemic. These will focus on getting back to saving and retirement investing, paying off debt and building best practices in the early days of a potential economic recovery.
Focus on your personal financial goals
As vaccination progresses, many of the creature comforts we’ve gone without for the past year will begin to re-emerge. Simple pleasures such as dining outdoors, going to the movies or attending a sporting event are becoming more plausible and safe. Larger purchases, such as vacations and travel, might also be on your mind.
If you’re trying to get back on track financially, however, it’s vital to keep your focus on your financial goals. Warmer weather means you have a wider variety of ways to spend your leisure time. For example, you could explore local outdoor adventures instead of more expensive weekend trips. You might also indulge in smaller treats, such as dining out, if you stick to a budget. For example, limit dining out to once a week or once every two weeks to enjoy yourself without undoing your hard work. Or go out for dessert instead of a whole meal, split an entrée or meet for happy hour rather than a full night out.
Spring and summer vacations can still be a good idea, but pick a location that’s closer to home or less expensive. You may also want to opt for a shorter trip to save on lodging expenses or book travel on less expensive days of the week. It pays to do your homework so that you can get the most value for your money.
Above all else, be sure to use credit wisely. This means keeping higher-interest debt to a minimum. Enjoying yourself shouldn’t come at the cost of a firm financial foundation; pick activities and indulgences that you can afford out of your own pocket to keep yourself on track.
Develop a personal finance strategy
If COVID-19 has presented you with financial challenges, you may need a fresh approach to your personal finances. Many people have had to alter their typical saving strategies to cover essential bills. But now, as the financial picture begins to look more optimistic, it’s crucial to develop a personal finance strategy that works for you but can also adapt to external financial challenges.
Paying down debt while building your savings can be a delicate balancing act, but it’s far from impossible. One common strategy is to put aside money in your savings account before paying other expenses. If you’re able to commit to setting aside a percentage of your paycheck every cycle, you can build liquid savings while allocating the rest of your check to bills.
This strategy comes with a few caveats: first, you’ll still want to put most of your income toward paying off debt. Don’t be discouraged if this means you’re not saving as much as you’d like to. Paying down your debt first will make a significant difference for your finances; when you’re out of debt, you can increase what you’re saving with the money previously spent toward getting bills under control.
When planning out your personal finance strategy, explore options for reducing your interest payments as well. Carrying a balance across one or more high-interest credit cards may cost you more in interest than you’d pay if you were to consolidate your debt with a personal loan, for example.
Ask for help
If the past year has taught us anything, it’s that we can rely on others to help achieve our personal goals. This goes for personal finance, too. That’s why it’s essential to partner with the right financial professionals to address your current financial situation, find ways to reduce debt and prime yourself for future investing and savings goals.
Going it alone to get your finances back on track can be a challenge for many. The sheer volume of different strategies and information can be overwhelming, making it essential to find professional help that you can trust. This could take the form of a nonprofit debt counselor, who can help you manage your money and outstanding debt payments. Friends can also help you stay on track with your financial and budgeting goals by keeping you accountable in a friendly, encouraging way.
The team at Discover Personal Loans can help you pay off other debt with a loan that makes the most of your financial situation. This can help you uncover opportunities you may not have known about, helping you to pay down debt as part of a robust personal finance plan.
Consider the benefits of a personal loan
When you’re trying to get back on track financially, it often makes sense to consolidate debt. This is particularly true if you have several high-interest loans or credit card balances. Debt consolidation can help you better manage what you owe by giving you one set monthly payment.
Personal loans do more than just consolidate debt; they may also help you save on interest through a fixed-interest rate. This means you know exactly what you owe in interest every month, rather than the variable interest rate and payments that can come with revolving loans.
Personal loans also provide you with greater flexibility to pay your way. You can set your repayment terms from 36 to 84 months, which helps you manage your debt according to your financial situation. For example,
For example, if you get approved for a $15,000 loan at 12.99% APR for a term of 72 months, you’ll pay just $301 per month. With interest rates at historic lows, now might be the right time to consolidate debt through a personal loan.
COVID-related disruptions may have led you to reevaluate your finances and health. As the world begins to open back up slowly, it’s a good time to think about your future, especially when finances are concerned. Getting back on track financially may take time and effort, but it is attainable with the right tools.
Discover Personal Loans can help you seize this opportunity to develop the right plan for your financial future, all while tailoring your lending options to your needs.
Our personal loan payment calculator helps estimate monthly payments based on the loan amount and credit score. Find out how a personal loan can fit within your financial strategy and help you get back on track.
Use our personal loan calculator to estimate monthly payments based on loan amount and credit score. Personal Loan Calculator