Fast and Easy Financial Solutions for 2021
New Year’s promises usually fail when they’re extremely ambitious, which can really hurt you when you’re focused on managing your money. Instead, focus on quick and easy-to-manage personal finance tasks that will keep you fit by 2021, like the ones below.
Top up your emergency fund
Nearly a third of Americans do not have an emergency fund, although most personal finance experts recommend saving money for unforeseen expenses like emergency care, loss of income, or car repairs as one of the most important things you can do. If your finances are not in bad shape, but you still don’t have a reserve fund to cover your expenses for 3-6 months, consider top-up your account with an upcoming $ 600 check (create a calendar reminder at mid-January can help you remember to do this).
Increase your 401 (k) contributions
With compound interest, a dollar saved at age 20 could be worth the $ 10 saved at age 50. With that in mind, take the opportunity to increase your 401 (k) payments (if you can), especially if your employer offers the appropriate premiums.
Sign up for automatic bill payment
Set up automatic payments in your checking account for all of your recurring accounts, including your minimum credit card payments. Otherwise, it is too easy to miss payments, which could unnecessarily damage your credit score and cause late fees. Likewise, automatic payments to your savings account can also help you create a financial reserve (say, $ 100 set aside for each paycheck). Check with your bank how to set up these payments – this option may be hidden on your bank’s website or app, but this is a normal checking account feature.
Get rid of banks that charge monthly fees
Speaking of banks, consider switching if you pay monthly bank charges on your checking account, as many of them charge you nothing for basic services (although your bank may also opt out of such fees, so it can’t hurt to ask before closing account). Some fees go up to $ 15 a month, which equates to $ 180 a year of unnecessary expenses. Learn more about how to change banks or opt out of monthly fees in this Lifehacker post .
Make a few calls to lower your rates
One of the most overlooked personal finance steps you can take is to simply ask your service providers for a rate cut from what you are currently paying, be it your mortgage provider, your insurers, issuing companies. credit cards, utilities, or cable / internet service providers. Take a few minutes to shop around and compare the commission or interest rates you face with other offers. Interest rates are currently quite low, which will give you some edge when contacting your service providers.
Update your beneficiaries
It’s easy to forget about labeling changes for your beneficiaries, but you should review and update them for life insurance, IRAs, and 401 (k) policies at least once a year. If you have gone through major life changes such as getting married, divorcing or having children, then your beneficiaries will change (for example, I had a brother as a beneficiary until I got married).
Check your credit report
Your credit rating determines how much interest you pay on loans, so it is important to track it for discrepancies and unexpected surprises. Make sure your credit report is free of identity theft errors or allegations – which is more common than you’d expect. Go to AnnualCreditReport.com to get free credit reports from all three credit bureaus . To learn more about how to read and understand your credit report, check out this Lifehacker post .
Change your passwords
This can be frustrating, but necessary if you want to avoid identity theft. Usually experts recommend changing passwords every three months , but at least once a year. It might also be a good time to sign up with a password manager like LastPass or 1Password.
Subscription audit
The average American spends $ 237 a month on subscriptions to either streaming TV services, apps, or pay-per-view news providers. But how much is actually used? Are you getting your money’s worth or can you shorten your list to save money? This Lifehacker post walks you through the process of auditing a subscription.
Change your credit card
The pandemic has had a significant impact on the credit card market, and if you’re still clinging to your travel reward card, it might be time to exchange it for a refund card if you don’t already have one. Don’t settle for high APY rates or overly trendy perks that come with huge annual fees, especially if your financial situation changes in 2020.
Set up your budget for the new year
Setting a budget can be daunting, but easier to deal with if you view it simply as a table of your known recurring expenses versus your income. You don’t need spreadsheets or fancy budgeting apps to do this (although they can be handy). The goal, of course, is to go beyond living paycheck to paycheck income and set aside money for an emergency fund, investment, and other savings goals. This Lifehacker post has an overview of the different types of budgets based on different savings goals, and it’s a good place to start.