Wishing a “good riddance” to 2020 and welcome to 2021! Although 2020 was a lost year for many, the Covid-19 Pandemic has re-written spending patterns that should be analyzed and discussed. There is much to be learned from last year, some of which can benefit us going forward!
Follow these 6 TIPS to improve your finances in 2021 and beyond!
- Evaluate Your 2020 Spending and Budget: This is the most important matter to take control of. The best way to address this is to go online and download (or you can order them by phone from your (CC) credit card company) a report of your 2021 spending by category. I just did this and compared it to 2019. Spending patterns have changed, and we can control them more easily because “spending less” is now a habit. Because I am not visiting many clients’ businesses, my auto and transportation expenses have gone way down, as have dry cleaning, restaurants, and travel. These decreases can be made permanent!
- Cancel Unneeded Subscriptions: While you are evaluating your expenditures, take time to look at various subscriptions, memberships, and other accounts, especially those on auto-renew on your credit card. Consider cutting services you might not be using. For example, I non-renewed some magazines and let my gym membership expire. Often, these companies will lower their fees or offer introductory rates to get you back as a new customer!
- Plan for a Delayed Tax Refund: Many Americans have not built up a proper 6 month’s income emergency fund. Others have lost their jobs and were forced to spend that emergency money as it was/is an emergency now! With the government in a transition, the 2020 tax returns might not arrive on time like they have in the past.
- Invest in Yourself: Now is a good time to take on-line courses, read self-improvement books and work on home improvements to name a few. These things can make you more marketable, increase your earning power and increase the value of your home. I also suggest taking the 6-hour on-line New York State defensive driver course which saves you money on your auto insurance for 3 years!
- Review All of Your Insurance Spending: There has never been a better time to review your total insurance portfolio spending. People are driving less often, so look at shopping your auto insurance and perhaps adjusting your coverages accordingly. Life insurance has changed over the past 3 years! If your life insurance policy is over 3 years old, a review is necessary and important! There are currently 2 term life insurance companies in New York State that offer their “chronic illness riders” for free, on term insurance. The chronic illness riders work like a long-term care insurance policy by providing a pool of money to use if long-term care is needed. You can withdraw a portion of your death benefit, while living, to pay for your long-term care needs. This is an amazing rider that very few insurance brokers are talking about. Outside of New York State, (in NJ, CT, PA, and Fla to name a few) those policy riders also include “chronic injury” which can pay off when in an accident. These new term insurance policies offer fantastic value for the premiums paid.
- Use Your Calendar and Family or Friends for Support: Write your goals down and communicate them to others (speak them into existence)! The best thing to do is to start with short-term goals. Try the month of January, for example. Covid-19 has in many cases helped us spend less money, so let’s keep this up as things normalize. Consider getting support around you and have someone else write into their calendar their own goals and schedule a weekly status phone call. Try teaming up with a coach or friend/family member to hold you accountable for at least the first 21 days until these are habits.
The takeaways here are that Covid-19 in some ways, have forced us to spend less money in many areas. This is a great time to analyze this and keep these better habits going forward, while things start to improve. To be added to our monthly e-newsletter list, email ADD ME to Rob@InsuranceDoctor.us and please include your full name.
BE POSITIVE, TEST NEGATIVE, KEEP THE FAITH!