The COVID-19 pandemic has taught us all some difficult lessons: lessons on how to be prepared, lessons on how to make smart decisions, lessons on resilience.
We have also learned some difficult financial truths in the past year. In its clinical and uncompromising way, the pandemic has shown us things about money that we didn’t necessarily know before.
Don’t let these harsh lessons go to waste. Your smartest move is to face these truths head-on: take real, proactive steps to lower your debt, lower your bills, and secure your future.
These are the harsh financial truths we learned in 2020:
1. Always have an emergency fund
The past year has taught us the hard way that everyone should have an emergency fund. You never know when you might lose your job or suffer some other catastrophe.
You need a place where you can safely store your savings, but still make money from it. Under your mattress or in a safe you will get nothing. And a typical savings account won’t do you much better. (Ahem, 0.06% is nothing these days).
But a debit card called Aspiration allows you to earn up to 5% cash back and up to 16 times the average interest on the money in your account.
It’s not bad at all!
Enter your email address here for a free Aspiration Spend and Save account. After confirming your email, securely link your bank account so they can start helping you earn extra money. Their money is FDIC insured and they use military grade encryption which is nerdy language because “this is totally safe.”
2. Make sure you have life insurance; Rates start at $ 5 / month
There has been a surge in interest in life insurance during the COVID-19 pandemic, as more Americans are realizing they probably need it. Overall, Americans bought about 10% more life insurance policies in 2020 than in 2019, the biggest increase in nearly two decades.
Have you thought about how your family would manage without your income after you left? How will they pay the bills? Send the children to school?
For many people, social distancing mandates and fear of infection have kept them from going to the doctor for an in-person exam. That’s leading more people to seek no-exam life insurance like that offered by a company called Bestow.
Your application can take a few minutes and fees start at just $ 16 a month. The peace of mind of knowing that your family is well cared for is priceless.
If you are under 54 and want to get a quick life insurance quote without a medical exam or even getting off the couch, get a free quote from Bestow.
3. Start Investing – This app gives you up to $ 200 in free stock
Obviously 2020 was a bad year for many of us, financially speaking. But some people cleaned because they invested.
- In early 2020, an Amazon share cost $ 1,900. At the end of 2020, it cost $ 3,250.
- In early 2020, a Tesla share cost $ 96. In the end, it cost $ 705.
The best time to start investing was a year ago. The second best time to start investing is right now. Whether you have $ 5, $ 100, or $ 800 to spare, you can start investing with Robinhood.
Yes, you’ve probably heard of Robinhood. Both beginners and investing professionals love it because it does not charge fees and you can buy and sell stocks for free, with no limits. In addition, it is very easy to use.
What is the best? When you download the app and fund your account (it doesn’t take more than a few minutes), Robinhood deposits a portion of the free shares into your account. It’s random though, so the stock could be worth between $ 2.50 and $ 200, a nice boost to help you build your investments.
4. Keep track of your credit score
There are a few ways the pandemic may have lowered your credit score in 2020:
- Any credit card payment was delayed.
- You are using most or all of your available credit.
- You cannot make your mortgage or student loan payments. If you have a federally backed mortgage or federal student loans, you’ve been able to request a delay, but that doesn’t include everyone.
Also, it’s up to you to check and make sure your slow mortgage and student loan payments are reported correctly on your credit report.
A good way to monitor this is through a free website like Credit Sesame, which will help you monitor your credit. Credit Sesame shows you your credit score, examines your credit reports, and keeps you up to date on any changes. It also shows you how to increase your score.
5. Ask for help, even if you normally wouldn’t
If you are in a particularly dire situation, do something you wouldn’t normally do: raise your hand and ask for help.
Sure, many of us would rather do anything but ask for help, but these are unprecedented times and life is a bit out of our control right now.
For example, if you are having difficulty making your mortgage payments, contact your lender. Sure, foreclosures and evictions are not allowed at this time, but your accounts could still go into collections and you could still face penalties.
You may need to provide proof that you have been laid off or need financial help, but it never hurts to ask about your help options.
This same idea can be applied to any of your other bills: rent, utilities, cell phone, and car payments.
You won’t know the answer unless you ask.
6. You shouldn’t overpay Anything
With our financial margins so tight in 2020, we did not take enough action to cut our monthly bills. For example, when was the last time you checked car insurance prices?
You should buy your options every six months or so as it could save you a lot of money. However, let’s face it. It’s probably not the first thing you think of when you wake up. But it does not have to be like that.
A website called Insure makes it easy to compare car insurance prices. All you have to do is enter your zip code and age, and it will show you your options, and even discounts in your area.
With Insure, people have saved an average of $ 489 a year.
Yes. That could be $ 500 back in your pocket just for taking a few minutes to look at your options.
Mike Brassfield ([email protected]) is a senior writer on The Penny Hoarder.