Can we hit CTRL ALT and Delete on the last two years?
We’re sure almost everyone would like to forget about 2020 and move on with their lives. But even though 2020 is a year we might want to forget ever happened, we can use the events of the last 24 months to learn important lessons about our finances.
If you lost your job in 2020 or experienced any other type of financial hardship, 2020 is also a learning curve to improve your financial health in the future. You can uncover the key financial lessons from the start of the new decade below.
Start a Saving Routine, Today!
Not everyone who lost their job during the pandemic had savings to fall back on. Some figures suggest that a terrifying 50% of us had no savings to rely on before the pandemic started. This would have caused significant stress and financial hardship for anyone who lost their job, especially for those with mortgages and children.
And although another pandemic is not likely to occur in the next few years (touch wood), you should use these experiences to start saving frequently.
You Should Have Three Savings Goals
Piling your savings into one pot is not enough. You should be saving into three different areas to save for emergencies like the pandemic, retirement and a general savings pot. Wonga, the digital lender has published its advice on the various lessons learned and the diverse savings goals we should all be aiming for after a traumatic year in this new post. We suggest checking in out regardless of your current savings setup as there is something on there for everyone to learn from.
Limit Your Long-Term Financial Commitments
Another lesson from the pandemic is to limit your long-term financial commitments that are hard to get out of quickly. Some of us had to keep paying for services that we didn’t prioritise during the pandemic, simply because the cancellation fees were excessive.
Some long-term financial commitments like a mortgage are excluded from this, but long-term gym memberships lasting over a year or a magazine subscription with an expensive exit fee might not be a good idea. Consider all your financial commitments and ask if you can escape them easily and how much they would cost you to get out.
Talking to Your Creditors Helps!
The best banks and lenders have stepped up during the pandemic to provide payment holidays and payment adjustments to those in need. It shows that communicating your financial issues with a creditor instead of hiding from them is worthwhile and clever to approach these problems.
If you have had to renegotiate payments with a creditor during the pandemic, hopefully, you will have found that talking to creditors about unforeseen circumstances is always the right choice.
Well folks, that’s our list. Hopefully you found a few of these worth the read. Remember to stay safe and keep saving!