Build Your Financial Future, Even in a Pandemic

There are always going to be things you can’t control in your life, like 2020’s pandemic. What you can control, however, is your approach to handling the different situations you are going to encounter. As you head into the new year, try not to look at bills, payments and daily expenses as inconveniences or a crisis each time you open the mail. Learn about where you are spending your money and work towards a point where you can better balance your finances.

A client relayed this personal story: “When I met my (now) husband, he had recently divorced and was accumulating a lot of credit card debt. Each month he would pay the minimum credit card payment, which means he would be in debt forever. I helped him create a simple budget on an Excel spreadsheet. In addition to the net income from his job and listing all of his expenses, we also listed what was actually being spent in a few key areas. Since he commuted, he went over his gas credit card receipts online over a two-month span to get a more accurate picture, and was surprised at how much he was actually spending. The other huge area was eating out. I’m not saying never eat out (we do!), but it is amazing how much you can save by making a sandwich or taking leftovers to work rather than running to the deli or fast food place.”

Within a year, all of his credit card debt was paid off, the couple carries a zero balance on their credit cards every month, and were able to qualify for a mortgage when we worked with them to purchase a home outside of Battle Lake.

Here is a great blog article about creating a simple budget. You can use online tools or just write things down. Excel (or the free version Open Office) works great because it will total columns for you.

Right now, many vendors are willing to negotiate a payment plan with you so you can pay off expenses and stay within your budget.

One of the biggest parts of a healthy financial mindset is understanding your spending habits and what financial obstacles are ahead of you. If you know you will need to spend money on an aging car or contribute support to a college age child, plan that into your yearly budget. Some life choices also make for some financial changes. If you’re thinking about moving, buying a home or finally starting a family, having a mindset that’s prepared for the financial consequences is important.   

Always have a nest egg. Having savings set aside protects you in so many ways. First, saving is a good habit and will prepare you to save for retirement. Also, if something happens along the way, like job loss or a vehicle accident, you can recover. However, once you tap into your nest egg, replace the funds as quickly as you are able. Then you will be better prepared for life’s curveballs.

There are always going to be hiccups that are going to test your positive financial mindset. The trick is to stay motivated, learn from your past financial mistakes and grow, keeping focused on being in a better position a year from now. What have you done right already, and what is the next step? Write any negative thoughts down, put them in a shoe box and then move the box out of sight. It’s a little trick to acknowledge your concern, but stay focused on the positive actions.

It’s important to remind yourself what you are grateful for in your life. Focusing on what you do have can relieve some stress about the future. Your financial mindset can continue to grow in the right direction while maintaining a balance of time with friends and family and activities that make you happy, as long as you stay within budget.

If you are unemployed, don’t be afraid to pivot, especially in the times of COVID-19. The stark reality many of us are facing is that certain jobs will not be coming back, or at least not for a long time. At the beginning of the pandemic, more than 22 million jobs were lost. Only 48% of those jobs were recovered by the end of summer. Industry analysts expect this trend to continue through 2021.

Even if parents have secure jobs or successfully retired, their young adult children may be facing economic hardship. A college age son we know lost his part-time job and was really down. The parents wisely discussed how their son could continue to be really upset and dread doing something else, or look at it as a new opportunity. Even if a new job is not ideal, do you want to go to work mad, or have a positive attitude and be happy? It’s a choice.

Most of all, don’t look at job loss as a personal failure. Jobs in some manufacturing sectors, tourism, air travel, office and administrative jobs, higher education and commercial construction and leasing roles are particularly hard hit. If you think your job may not be coming back, start thinking about what you can do. Even though a different, and often lower paying job may not be your ideal, it may be what you need to get through this period of time we are all going through. It’s a heck of a lot better than wondering whether unemployment will be extended or if you will ever be called back to work. You might also consider expanding a side hustle– turn child care, appliance repair, baking or other talents into more of a money-making venture.

Finally, you don’t have to go it alone. Tap into community resources available to all people who have been affected by the pandemic in Otter Tail County to ease your financial burden. We’ve gone through the disbelief, panic and upset of 2020. Let’s make 2021 about resolve, flexibility and positive thinking to pull ourselves out of a personal financial crises.