The COVID-19 pandemic has taught us all some hard lessons — lessons about being prepared, lessons about making smart decisions, lessons about endurance.
We’ve learned some tough financial truths over the past year, too. In its own clinical and uncompromising way, the pandemic has shown us things about money that we didn’t necessarily know before.
Don’t let these hard lessons go to waste. Your smartest move is to confront these truths head-on — to take real, proactive steps to cut your debt, lower your bills and secure your future.
Here are the tough financial truths we learned from 2020:
1. Always Have an Emergency Fund
This past year has taught us the hard way that everyone should have an emergency fund. You never know when you might lose your job or suffer some other catastrophe.
You need a place where you can safely stash your savings away — but still earn money on it. Under your mattress or in a safe will get you nothing. And a typical savings account won’t do you much better. (Ahem, 0.06% is nothing these days.)
But a debit card called Aspiration lets you earn up to 5% cash back and up to 16 times the average interest on the money in your account.
Not too shabby!
Enter your email address here to get a free Aspiration Spend and Save account. After you confirm your email, securely link your bank account so they can start helping you get extra cash. Your money is FDIC insured and they use a military-grade encryption which is nerd talk for “this is totally safe.”
2. Make Sure You’ve Got Life Insurance; Rates Start at $5/Month
There’s been a surge of interest in life insurance during the COVID-19 pandemic, as more Americans are realizing they probably need it. Overall, Americans bought about 10% more life insurance policies in 2020 than they did in 2019 — the largest increase in nearly two decades.
Have you thought about how your family would manage without your income after you’re gone? How will they pay the bills? Send the kids through school?
For many people, social distancing mandates and fear of infection have prevented them from going to a doctor for an in-person exam. That’s leading more people to seek out no-exam life insurance like the kind offered by a company called Bestow.
Your application can take minutes, and rates start at just $16 a month. The peace of mind knowing your family is taken care of is priceless.
If you’re under the age of 54 and want to get a fast life insurance quote without a medical exam or even getting up from the couch, get a free quote from Bestow.
3. Start Investing: This App Gives You Up to $200 in Free Stock
Obviously, 2020 was a bad year for many of us, financially speaking. But some people cleaned up because they invested.
- At the beginning of 2020, a share of Amazon stock cost $1,900. At the end of 2020, it cost $3,250.
- At the beginning of 2020, a share of Tesla stock cost $96. At the end, it cost $705.
The best time to start investing was a year ago. The second best time to start investing is right now. Whether you’ve got $5, $100 or $800 to spare, you can start investing with Robinhood.
Yeah, you’ve probably heard of Robinhood. Both investing beginners and pros love it because it doesn’t charge commission fees, and you can buy and sell stocks for free — no limits. Plus, it’s super easy to use.
What’s best? When you download the app and fund your account (it takes no more than a few minutes), Robinhood drops a share of free stock into your account. It’s random, though, so that stock could be worth anywhere from $2.50 to $200 — a nice boost to help you build your investments.
4. Keep Track of Your Credit Score
There are a few ways the pandemic may have lowered your credit score in 2020:
- You were late on any credit card payments.
- You’re using up most or all of your available credit.
- You can’t make your mortgage or student loan payments. If you have a federally backed mortgage or federal student loans, you’ve been able to ask for a delay, but that doesn’t include everyone.
Also, it’s on you to double-check and make sure your paused mortgage and student loan payments are being properly reported on your credit report.
One good way to keep tabs on this is through a free website like Credit Sesame, which will help you monitor your credit. Credit Sesame shows you your credit score, examines your credit reports and keeps you updated on any changes. It also shows you how to raise your score.
5. Ask For Help — Even If You Normally Wouldn’t
If you find yourself in a particularly dire situation, do something you normally wouldn’t: Raise your hand and ask for help.
Sure, many of us would rather do anything but ask for help, but these are unprecedented times, and life’s a little bit out of our control right now.
For example, if you’re struggling to make your mortgage payments, reach out to your lender. Sure, foreclosures and evictions aren’t allowed right now, but your accounts could still get pushed to collections and you could still face penalties.
You might have to provide proof that you’ve been laid off or need financial assistance, but it never hurts to ask about your relief options.
This same idea can be applied to any of your other bills — rent, utilities, cell phone and car payments.
You won’t know the answer unless you ask.
6. You Shouldn’t Overpay for Anything
With our financial margins so tight in 2020, not enough of us took action to trim our monthly bills. For example, when’s the last time you checked car insurance prices?
You should shop your options every six months or so — it could save you some serious money. Let’s be real, though. It’s probably not the first thing you think about when you wake up. But it doesn’t have to be.
A website called Insure makes it super easy to compare car insurance prices. All you have to do is enter your ZIP code and your age, and it’ll show you your options — and even discounts in your area.
Using Insure, people have saved an average of $489 a year.
Yup. That could be $500 back in your pocket just for taking a few minutes to look at your options.
Mike Brassfield ([email protected]) is a senior writer at The Penny Hoarder.