After a year dominated by the COVID-19 pandemic, it's no surprise that many of us have set our sights on better financial stability in 2021. And in early January, with New Years resolutions to save more money still in effect, KREM 2 turned to local financial consultant, Eric Christiansen, for suggestions on simple tips and strategies to make-- and save-- more money this year.
Christiansen is the owner and CEO of Quantum Financial Planning Services, Inc in Spokane.
Short-term emergencies and long-term security
Surviving the pandemic that decimated the year 2020 may have sapped savings accounts and emergency funds, which is where Christiansen says our top focus should go.
"If something happens and the car breaks down, or something goes wrong," Christiansen asks, "do you have something sitting in the bank in case to help yourself out?"
Rebuilding that emergency fund is a great opening suggestion for short-term security, but long-term security is important too, especially when it comes to supplementing your retirement plan.
"Make sure you're thinking about your contribution to your retirement plan," Christiansen says. "Ask yourself if this is a good time for you to increase your payments into that plan. And if your emergency fund and retirement plans feel stable, maybe it's a good time to relook at your mortgage payment. Right now interest rates are really low, so have you thought about refinancing?"
Opportunities to save
About 33% of Americans have chosen to spend their stimulus checks on paying off debt, with another 33% aiming that money toward building their savings, Christiansen says, and now might be a better time to save cash than any time in recent years.
On average, according to Christiansen, savings rates across the country have doubled from approximately 4% to 8% interest rates, giving prospective savers even more incentive to tuck extra money away.
But there is still no guarantee that future stimulus checks will continue coming out, and eventually the additional $300 unemployment check bonuses will fade away. Christiansen says these present perfect opportunities to stash away extra cash too.
"How do we pay ourselves first?" asks Christiansen. "It's those simple things like buying that coffee on a daily basis... Could you be saving that? That $15-25 per week-- that 3% of your pay-- those little tiny things add up tremendously, especially if you're putting it toward retirement.
"If you're on an unemployment check, are you saving a little bit of that? If you're getting to the point where you're in a position that the unemployment check's not going to be there, have you saved up? Can you get through the next few months before you're able to find a job?"
Avenues to invest in yourself and your community
Christiansen points out plenty of big businesses are still booming during pandemic times, specifically those who might be oriented around people staying home.
Simple research on those types of companies-- like Amazon, Google, Microsoft, or Netflix, to name a few-- could yield some opportunities to invest in the stock market.
But part of our collective consciousness as a community, Christiansen says, should also be oriented around boosting up our community around us, when we can afford it.
"We all want to support our local businesses, buy from our local restaurants," Christiansen says. "Those are the people and the things that we need to be paying attention to, because those are the people that are hurting and need extra help."