Friday, 11 December 2020

It's difficult to imagine that a year as challenging as this one may be a gift to your financial bottom line. 

Regardless of the generation to which you belong, this year has created some unexpected opportunities, allowing us to rethink and reimagine how we live our financial lives. COVID-19 has created a financial reality check forcing many of us to ask ourselves the following questions:

And the final question that has kept many people up at night—how healthy are our finances, and how can they be improved moving forward?

As we work through those and other questions, you may be surprised to discover that several hidden financial changes may actually end up helping your long- term financial health.

Increased ease in setting financial boundaries

One of the best things to come out of 2020 is the ability to communicate and set clear financial boundaries. These boundaries may range from saying "no" to spending on something that doesn't serve you well, or saying you would prefer to wait until COVID-19 passes before saying "yes" to an outing, trip or experience that you may not want to spend money on right now.

For individuals on debt-repayment journeys or those looking to save money aggressively, this year has made it easier to stick to and communicate those goals to others in your circle. In fact, it's much easier to explain why you're trying to pay down your debt or save money during uncertain financial times. Clearly defined financial boundaries are a great way to stay focused on your financial goals despite what's happening in the world around us. 

Discovering surprising opportunities to save

As we continue to stay close to home and try to manage our interactions with others, some surprising savings have popped up for many. For instance, some employees are finding that their daily budgets have changed significantly. Many of the hidden costs associated with commuting to work have been exposed with the replacement of remote work arrangements and minimal in-office work time.

We're saving money on clothing because we no longer need to dress up for work as often. Work from home means we're purchasing fewer snacks at the office or on the way to the office. And many of us have saved significant amounts of money on gas and car insurance because we're not driving as much as we used to.

It's likely that we'll continue to see significant savings in those areas of our budgets well into the new year. The added bonus: Now may be a great time to increase your rainy day savings account funded by these unexpected savings.

Access to financial relief

Unfortunately, this year has also created unexpected financial distress for many due to changes in work hours or job loss. The CARES (Coronavirus Aid Relief and Economic Security) Act was passed with the initial goal of connecting US citizens to various types of financial resources and support as everyone worked through the uncertainty of the moment.

Private sector businesses and nonprofits also created programs unique to this moment in time with the goal of helping businesses owners and citizens find stable financial footing. As we move into the upcoming year, there may be additional opportunities for financial relief.

The CARES Act has allowed many qualified borrowers to defer payments on mortgage or student loan payments. While some of the benefits associated with the Act have expired, new financial relief programs may be introduced in the upcoming year.

Lack of urgency

Before COVID-19, everything felt so rushed. We were rushing to work, going to events, and bringing the kids to and from their activities. Now that we're spending significant time at home, there has been a decrease in the urgency to make certain decisions.

This lack of urgency in our financial lives gives many consumers the opportunity to research and plan their next financial moves with less stress. If you're looking to buy a new car, set up your first 401k, or request a new credit card, for instance, you have the opportunity to spend a little more time working through your next financial decision.

Earn more

Finally, now may be the time to give your profession and professional role a second look. Do your research and spend some time assessing if your organization is open to having a conversation about increasing your earnings or your benefits. This may also be the moment to explore new professional opportunities with a new organization in a different professional role.

A surprising take from the current COVID-19 crisis is that now is the perfect time to reassess your finances and take steps to improve them moving forward.

This year has been difficult. For many people, however, there have been a number of unforeseen financial opportunities. Take advantage of this moment to achieve the financial goals you've been working toward.

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