Drawing up a new list of financial resolutions is not a routine task before. The COVID-19 pandemic has changed this situation because it has changed many other behaviors.
According to Fidelity Investments’ “New Year’s Financial Resolutions for 2021” survey, this is not only the usual way to plan to save money, reduce debt or re-evaluate spending, it is the three most popular currency resolutions this year.
On the contrary, the COVID-19 pandemic and its financial pressures have brought a new sense of urgency to certain goals, as well as different challenges and new opportunities.
Estimate Expenditure Budget
The budget is listed as the most important financial solution every year. But this time, things are different because the pandemic has changed the way many people spend their money.
If you look back at how you spent the past year or two, you might find key differences and areas that might need improvement.
For example, you may not drive anymore, so you may not need the same level of the car. Maybe you don’t need to buy too many clothes, especially at work, or maybe you spend much less on entertainment and restaurants.
Most likely, you have reduced the travel time. Maybe you can reduce these expenses permanently.
“Take an inventory of what you did in 2020 and use it as a roadmap for 2021.” Suggested Bobbi Rebell, Splitit’s certified financial planner and consultant. Splitit is a website that helps people pay in installments for interest-free purchases. “Our definition of demand has changed a lot.”
Assess your Insurance Needs
You may have noticed that you do not need the same type or level of protection as before. Nowadays, more and more people work or study at home, and car insurance is an obvious example.
This means that the number of cars on the move has been reduced, the incidence of vehicle accidents has been greatly reduced, and the insurance contract has become more complete.
In a recent review of accident statistics, the American Consumer Federation and the Center for Economic Justice said: “The sharp drop in accidents this year has led to a sharp drop in claims paid by insurance companies.”
These groups want to see insurance companies lower their premiums – many people will. Therefore, this may be a good time to assess your insurance needs and focus on shopping around.
Conversely, if the value of your home has risen, you have recently completed a renovation project, or established a new home business, you may need more home insurance or other types of home insurance.
Plan an Unreliable Tax Refund
Many Americans have not yet established an emergency fund, and the outbreak of COVID-19 and massive unemployment is of no avail.
But it may be particularly necessary to accumulate a cash buffer now, because you may not be able to count on the predictable annual income tax refund as in the past.
Tax rebates are the biggest change many Americans have made throughout the year, and they are also the main source of funds for repaying credit card balances.
However, the closure of offices to contain the virus slowed the processing of tax returns and slowed down part of the IRS refunds.
The IRS warned in December: “Taxpayers should not rely on getting refunds on specific dates, especially when making large purchases or paying bills.” Certain tax returns may require further review and processing may require Longer time. “
The Internal Revenue Service (IRS) stated that it has anticipated that refunds related to income tax credits and additional child tax credits will not be issued before mid-February.
Stay alert online
The internal Revenue Service (IRS) and other entities have warned that online fraud activities related to stimulus payments, measures to mitigate the coronavirus, etc. will increase.
Given that many federal and state programs are new, it is easy to get confused. Besides, during the COVID-19 outbreak, more people are shopping online, which increases the chance of victims falling.
Therefore, we need to be vigilant. The main points include: being skeptical of the quotations of unfamiliar companies, avoid clicking attachments, and be alert to unsolicited news from the National Taxation Bureau and other national tax authorities, which will not initiate contact in this way.
Besides, take this opportunity to change the password to reduce the chance of the unit being hacked.
Americans don’t change their passwords often. They also don’t use complicated and lengthy passwords.
Password manager NordPass said it was determined by checking 275 million passwords with the help of a data breach security company. Only 44% of them are unique.
The list of most common passwords in 2020 is similar to the list of passwords in 2019. For example, the numeric string “123456” is close to the previous two years. Other common ones include “password”, “picture 1”, “111111”, “qwerty” and “abc123”.
Cancel Unwanted Subscription
Rebell said that when looking at expenditures, take the time to evaluate your various subscriptions, memberships, and other accounts in the hope of eliminating subscriptions that are no longer in use.
If you no longer use these services, you can cancel the automatic recurring payment tied to your bank account, mobile phone, or another account.
Cancellation is not necessarily permanent and can lead to better deals. If you change your mind, you can re-subscribe to the service at any time and may receive coupons, introducing rates or discounts, Rebell added.
Besides, please try to reduce paper confusion by registering for email statements.
The pandemic does not require these and other measures to make the organization more organized, but now you may finally have time to do all the work.
Invest in yourself
Even before the arrival of COVID-19, many Americans found that their work and financial knowledge and skills were insufficient.
This may be a good time to take courses or make other personal improvements, especially since many of them can be completed online.
People usually think about financial solutions in terms of saving more or reducing debt, but learning and earning more income are also important, pointed out Dana Anspach, a Sensible Money certified financial planner in Scottsdale, Arizona. She said: “Learning is the basis for making smarter investment decisions and increasing your profitability.”
As with any resolution, Anspach said, it is vital to have a plan to achieve it by defining feasible steps and putting them on the schedule.
Other useful tips include staying with a mentor or responsible partner and following a course of action for at least three to four weeks until the new behavior becomes the norm.