3 Money Lessons We Can Learn from 2020
We are all ready to leave 2020 in the past where it belongs, but before we shut the door on this past year there might be some money lessons worth holding onto heading into 2021. For those that struggled this past year financially, don’t worry you are not alone. While we can’t change the past we can learn from it and use it to help us prepare for the future. Here are three money lessons we can all take from 2020.
1. Life doesn’t always go as planned
No one ever knows what could happen next. Financially it’s important we build that safety net to catch us when the unexpected hits. It is tough planning for something that might not happen, but after 2020 we can all feel better knowing we are prepared for whatever might happen. To kick start you emergency fund start by saving with each paycheck. It might be daunting to focus on the total goal, so why not break it up into a few attainable goals and build momentum off each of them.
Goal #1: Save 1 week’s salary
Goal #2: Save 1 month’s salary
Goal #3: Save 3-6 month’s salary
Remember, you won’t have that fund to lean on unless you start somewhere – start with a high-yield savings account that earns a competitive rate.
2. Focus on what matters
With not a lot going on socially, the pandemic helped us focus on what is important in our lives. Many of us might have realized that there is a lot of “stuff” we can live without. Money wise, this opens the door to rethinking our budget for the new year. What you used to spend money on last year, might be able to be turned into money you start saving this year.
3. Debt is never good
It might be easier to spend money when you don’t have to think about paying it off in the near future. The only problem with that is sometime or another, the time will come that you will have to pay off that debt. Make this year the year you stop adding to your debt, and instead take the right steps to start minimizing your debt. Replace your credit card with your cash back debit card so you receive rewards while only spending the money you have to spend.
Head into the new year with a bank that will support your financial new year resolutions.