February 1, 2021

Fortify Your Finances in a Shaky Economy

By Ann Lloyd, Student Savings Guide

Achieving financial security can be challenging in the best of times, but here we are in a pandemic, finding our assumptions tested and our nerves frayed.

Some of us have faced employment issues, budgets blown out of the water, and a shredded safety net. But that doesn’t mean we should abandon the financial strategies proven to build finances in the past. We just need to adapt them to a new reality — one that’s changing almost by the moment.

No one says it will be easy, but that doesn’t mean it’s not essential, and the good news is that many of the same principles that worked before still work today. You just have to apply them to a new normal. Here’s how.

Assess your debts

Whether it’s student loans or car payments, take a look at your debts and set up a realistic payment plan that takes into account your changing circumstances. If you can’t afford to keep making the same payments, contact your lenders and see if they’re willing to renegotiate or defer payments until you can get back on your feet.

Inventory your assets

You may have more money than you think locked up in nonliquid assets. Take a look at what you’ve got in the attic and determine what you no longer need — and what might have some value. With online sales outlets like eBay at your fingertips, test the market for your collectibles and knick-knacks. You may find they’re worth more to someone else than you thought. 

Downsize your stuff

Even if you can’t sell some of the things you’re no longer using, you might want to consider clearing them out, anyway. Donate them to charity or give them to a friend. You’ll feel better having more room in your house — you may even find that you want to move into a smaller place. Doing so could save you money on rent, utilities, insurance, etc. 

Economize your habits

While you’re at it, downsize your expenses where you can, too. Ask yourself some questions about your spending habits. You know all those “three-month free trials” you signed up for? The ones that started charging you after you forgot about them? Find them and cancel them. 

Are you really watching all those cable channels and streaming services? Do you need as much insurance as you’re carrying? The answers to these questions could save you a lot.

Build your credit

When you’re living paycheck to paycheck, credit might seem like a luxury you can’t afford. But this crisis won’t last forever, and the sooner you can start building or rebuilding your credit, the better off you’ll be in the future. If you have some ready cash, use it as collateral for a secured credit card, which will allow you to build credit without sacrificing spending power. 

Take back your (electrical) power

Check your utility bills and find out if you can cut costs by lowering your thermostat during the winter or raising it in the summer. At the opposite end of the spectrum, give yourself a backup in case the power goes out by purchasing an economical backup generator. It can keep you online while working from home, protect against spoiled food, and even lower your insurance costs.

Network, network, network

Many of us have been isolated during the pandemic, so it’s more important than ever to touch base with your contacts and grow (or at least maintain) your list. Monitor professional networking sites like LinkedIn, and stay dialed-in with former colleagues via email, Zoom, or other platforms to share advice, ideas, and career opportunities.

Check out government programs

In addition to stimulus checks, the government is providing a range of relief opportunities during the pandemic, including student loan deferrals and protection against eviction. Find out whether you qualify for unemployment relief (which has been extended). Relief is also available to independent contractors, self-employed workers, and those with a limited work history.

Create a new source of income

Whether you’re unemployed or just strapped for cash, it pays to explore new ways to earn money. Seek out training opportunities online or through extended education. Look for short-term opportunities, too, such as dog walking, yard work, delivery services, selling crafts through Etsy, or house cleaning services. (Don’t forget to wear a mask and bring sanitizer.)

In this constantly changing environment, it pays to continually reassess your position and your options. The ideas and avenues you’ve depended on may not be as reliable as they once were, but other opportunities are available if you broaden your horizons and open yourself to new possibilities.

If you look for ways to save more money, spend less, earn more, and make more prudent choices going forward, you can find plenty of reasons for optimism, even during difficult times like these.

Ready to get serious about paying off debt?

Start Your Free Trial