The future is always uncertain. Perhaps now a little more than usual. Many people are facing more questions than ever before about their future related to their health, finances, jobs, and businesses. We understand this is unsettling. Here are some quick tips on how to save money, pay off debt, and get yourself in a better position in case another catastrophe hits.
As you look ahead, there are many valuable lessons to take from all of this. One being how financially prepared you are for the future and the unknown. Unfortunately, there are many things in life you simply cannot predict. But, making sure you are as financially stable as possible if something like this were to happen again is vital.
Here are a few suggestions to help you plan for the future and assist with improving your current financial situation.
If it is within your power to do so, continue working as much as you can. Even scope out opportunities to bring in extra money during this time, if available. Then, focus on saving all you can and limit unnecessary spending. Learning how to save money will be your greatest asset in obtaining financial stability.
While it may be tempting to spend your stimulus check, instead, put it into savings. Again, since the future is unknown, it’s better to have emergency funds available that you can fall back on if something were to happen. Being financially prepared can prevent a lot of headaches down the road.
Pay Off Debt
Debt can quickly become crushing during times like these. Begin working now to pay off your loans in a logical, systematic fashion. The less debt you have, the easier it is to negotiate with creditors if you need to do so in the future.
- Begin by paying off your highest interest rate loans and credit cards first.
- Pay extra each month towards the principal (if you’re able to do so without prepayment penalties).
- Keep chipping away, even if things look like they’re getting better, until you erase the debt.
- Avoid creating new debt during these uncertain times, if possible.
Every bit of debt you can eliminate helps improve your overall financial position and credit standing. Need help sorting it all out? We’re here to help! Make an appointment with a free financial coach.
Borrow Money But Keep Your Savings
A savings secured loan is the perfect way to pay for something but not drain your savings account.
Let’s say you need to fix your car for $1,000 and you already have $1,500 in your savings account. Instead of wiping out most of your hard-earned savings by paying cash to fix your car, the Credit Union would take $1,000, put a hold on it, and make a loan with it. You’re essentially using your savings as collateral.
Because this is a secured loan (low risk for the Credit Union), it offers a VERY LOW rate. You won’t pay much in interest, and once the loan is paid off, you will STILL have your hard-earned savings!
This is the best way to ensure you keep a little cushion of savings even when you need to borrow money for something.
Only Seek Assistance If Needed
Most financial institutions are offering generous financial relief programs to those in need. However, many of these are one-time-only opportunities. If subsequent shutdowns become necessary, they may not be available if you took advantage of them this time. It’s important to assess your current financial situation and apply for these programs only if necessary.
Also, you must read the fine print if you do take advantage of these opportunities. Some of the loan forbearance programs and other “safety nets” require lump-sum payments once the forbearance period ends. If you do not understand these programs and the repayment plans, you may be facing additional financial challenges in the future.
We’re Here to Help!
We understand there is a lot of uncertainty, financially and otherwise, in the world today. That makes it even more important to save when possible. As a member, you have access to a wide range of products and tools to manage your savings even more efficiently, including savings accounts, automated transfers, and more.
To learn more about the financial relief programs available through the Credit Union, call, chat, or come in. We’re here to help you make the right financial decisions for your unique situation.
Each individual’s financial situation is unique and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.