2020 was disastrous for millions of Americans, and 2021 is the opportunity many need to recoup and reset after such a tumultuous year. Here are the biggest missteps of 2020 and how to avoid them in 2021.
Lack of Emergency Funds
Emergencies happen. Unemployment and layoffs happen. And an emergency fund can mean the difference between financial breathing room or homelessness. The goal is to have 6 months of expenses saved should the worst happen. By having 6 months of savings, you give yourself the ability to get back on your feet without making major changes to your lifestyle. Find a savings account that can earn you cashback on debit card purchases and a high interest rate to maximize your savings.
Investing can add to your financial security. Start small with micro-investments that cost less than your daily coffee and build your portfolio over time. Diversify, pay attention to smaller companies that have potential and watch your investment portfolio grow.
Not Having Life Insurance
Having life insurance can be vital to the survival of your family should the very worst case scenario occur. No one likes to think about their own death, but if you’ve got loved ones to think about, you need to be thinking about how to provide for them after you’re gone. Rates can be as low as $16 a month and will give you and your family peace of mind in an unpredictable world.
Not Tracking Your Credit Score
If you’ve avoided checking your credit score, you should probably be checking your credit score. So many Americans are at risk or have already lost their homes due to eviction and foreclosure. Knowing your credit score and working to improve your score can offer you more security and options for you and your family.
Addressing these 4 issues now can help you mitigate financial disasters and ensure your security and safety for years to come.