For two years our nation has had to adapt to an entirely new reality. From social distancing to keeping our sanity while sheltering-in-place, virtually every aspect of our lives has been affected, with new and different ways of social interaction, school, work, and entertainment.
Government HelpGovernment came to the rescue. From the CARES Act to multiple stimulus checks, enough money came in to prevent many of us from suffering serious economic harm. We could eat, and if the assistance wasn’t enough to pay our bills, the debt forbearance program allowed us to forestall making monthly payments for rent, vehicles, student loans, and credit cards. In fact, so much help was provided that many of us were able to sock away more savings during the pandemic than we had before the virus arrived.
Jobs Are PlentifulToday we have good news on the job front. The nation has all but returned to the strongest job market in decades. Jobs are plentiful, so much so that companies are having difficulty hiring. With what we saved from pandemic government assistance, and with a great many jobs to choose from, the future is looking better and brighter. It’s time to rebuild our lives and strengthen our financial future.
New Technology Continues to HelpNew vaccines came to us at “warp speed” through new technologies, but a great deal of other assistance came through these new technologies as well. Remote learning removed the obstacle of face-to-face college courses and expensive tuition. Zoom video conferencing replaced driving to work and settling into your cubicle.
The technology that helped us navigate and survive the pandemic also created numerous money-making opportunities. So-called gigs and side hustles have become the preferred choices for working today, in many cases allowing remote work to continue. Skills are offered and advertised in virtual marketplaces, and those skills can be enhanced through educational tools available on YouTube. We can learn Python programming, for example, online for free.
Planning and BudgetingUse this time as an opportunity for reflection. Rather than simply return to all the activities you were accustomed to, why not take a clean slate and list your priorities, including the financial aspect of each one? Start with a simple budget. List your sources of cash and your anticipated expenses, with as much left over as possible to boost your savings. A goal of saving 20 percent of your expected take-home earnings may be difficult, but it will pay future dividends. You will sleep better, knowing money is not going to be your chief concern.
With an eye toward future pandemic-like disruptions, take a cautious, careful, and conservative approach toward saving as much as possible. Make your emergency fund a priority! Almost as high a priority should be paying down debt. Avoid the stress that comes with not knowing if you will be able to pay your bills on time.
Inflation and the Cost of LivingThough the news on the job front is encouraging, inflation is driving up prices, so your expenses will probably be trimmed. Inflation has hit some products and services more than others, so a reshuffle of the ways you spend your money may be required. Restaurants, for example, have become a far more expensive choice. That may mean eating out less, choosing less expensive restaurants, and avoiding expensive menu items like alcoholic beverages.
The savings plan you choose will depend upon access to investment opportunities. This may be a good time to find a financial advisor to help walk you through investment options and opportunities. If you can save 20 percent of your take-home pay, your financial advisor may suggest a variety of investment choices that will grow your savings and investment portfolio, all the way to your planned retirement. A savvy advisor will start with the amount you can save, discuss your retirement savings goals, then work backward to help you make investment choices that reach those goals.