If you’re like millions of Americans, then you may be finding it difficult to build out a long-term financial plan with any efficacy right now. Indeed, considering the volatility of Wall Street, the job market, and the uncertainty over future stimulus packages, the “average” U.S. citizen is likely having a very difficult time figuring out how to manage their money. With that in mind, today we’ll attempt to clear up at least some of this confusion and highlight four issues that any new financial plan must address. This should help you form the beginnings of a successful budget regardless of your personal situation:
Essential Goods & Services
Sounds obvious, right? Of course, all good budgets need to allow individuals to pay for things like groceries, rent, and utilities. However it’s worth remembering that programs like rent forgiveness –– as well as federally extended unemployment benefits –– are set to end for many people in the coming days/weeks. As such, if your current income doesn’t adequately cover these costs without such assistance, then you need to either 1) reallocate funds or 2) increase your income capabilities. (Or, ideally, do both at the same time.)
Odd though this might seem, it’s become easy to overlook common medical issues in 2020. With so much focus on COVID-19, individuals may be putting off dealing with medical issues that, in reality, they need to address. Whether you need to see a doctor about a worrying rash or to have a painful bunion removed, your financial plan should account for such potential expenses. (Note, for more information about bunion removal, check out these before and after bunion surgery pictures here.)
Bills & Debt
Across the board, many people have benefited from freezes on bills for debts like student-loan payments. Unfortunately, those freezes will not last forever, and you may be forced to start paying off debt again sooner than you initially planned. So adjust your financial strategy accordingly.
Some economists have predicted a “v-shaped” recovery to take place on the stock market. Others have displayed cautious optimism and predicted slower, more measured gains. Few, though, have discussed the possibility of a backslide amid worsening economic conditions. Yet, there’s no guarantee that the stock market will continue to recover after it fell massively at the outset of the pandemic. Restrictions may cause certain businesses to shut down again, and if people lose access to financial support from certain federal programs, the economy as a whole could suffer. Don’t count on exponential growth even if things look better today. Instead, prepare for a potential backslide and protect your financial well-being.
Disclaimer: This content does not necessarily represent the views of IWB.