With the advent of a new year, the future remains uncertain.
Although there is now a vaccine, it’s unclear how quickly it will be available for most Americans. Although the idea of another round of stimulus checks is being floated as a solution to reduce the dire financial straits millions of Americans face, the details are unclear. And, although the new president will be inaugurated on Wednesday, January 20th, it is unclear what immediate action the new administration will take to clear the many issues affecting the country, from rolling out the vaccine to economic recovery.
Since the future remains uncertain, it is essential that you do your part in improving your personal finances as best you can. Here are some steps you can take to rebuild your finances before the country returns to normalcy.
Consolidate Your Debts
One of the most effective ways to clear your high-interest credit card debt is to apply for a debt consolidation loan. This type of loan is specifically designed to speed up the process of debt repayment. It’s financing that you can use to pay off all your credit card debts at once. You can then turn your attention to paying off the loan in monthly installments, paying an affordable amount, a sum that you and the credit counselor have determined based on your monthly income and expenses.
Focus on Wealth Building
Before paying anybody off for anything from your paycheck, pay yourself first. It doesn’t matter how little you earn or how many bills you need to pay each month, pay yourself first.
Initially, you may have to pay yourself very little, but this act of courage will then create positive financial momentum. Over time, the money in your savings account will build.
Prepare for Emergencies
Unforeseen circumstances pop up all the time. A home repair, school tuition increase, overlooked bill, or job loss could alter your financial situation. Fortunately, consumers can obtain a loan without a credit check to cover small emergencies and repay in installments that are more convenient.
While taking advantage of short-term loans in emergency situations can get you out of a jam, the best way to prepare for emergencies is to create an emergency fund.
Set three goals:
- First, set aside enough money to cover a month’s living expenses.
- Second, set aside enough money to cover three months of living expenses.
- Third, set aside enough money to cover six months of living expenses.
Once you’ve got at least six months of living expenses covered, then turn your attention to saving for investments. While your investment savings are growing, study investments then start investing. Learning how to invest is a journey that takes time and patience, but start slowly, learn from experience, and then build up your investment portfolio.
Protect Your New Wealth
Although it will take time and effort to build wealth, a journey that will start with saving at least six months of living expenses and then developing a passive income stream, you’ll be surprised at how easy it is to lose everything quickly when you don’t take sufficient steps to protect your wealth.
Here, then, are three steps to protect your wealth.
- Protect your wealth from your own enthusiasm. Because you can now buy many of the things that you always wanted, perhaps a nicer car or a bigger home, you may feel tempted to blow your money. Instead, it’s wiser to continue to live below your means, focusing on generating value through building up your savings and making wise financial investments rather than impressing family and friends with your financial success.
- Get insurance for everything that requires financial protection. Consult with an insurance agent to make sure you strike the right balance between being under-insured and over-insuring your various assets. This is something that you can only determine after evaluating all your assets.
- Speak with a tax professional and a lawyer to make sure you have sufficient tax and legal protection.
Your Wealth Journey In A Nutshell
Begin your wealth journey by putting a stop to paying high interest on your debts. Clear your debts as efficiently as possible so that your money is no longer being drained by servicing these debts. Next, focus on creating wealth by creating savings and building an investment portfolio. Finally, focus on protecting your hard-earned wealth.