It is vital that all Americans grow up with a healthy and balanced attitude and understanding of personal finances, and this applies to the children of wealthy and not-so-wealthy households alike. You might be surprised how fast you can burn through a lot of money on leisure, and everyday expenses such as health insurance payments or auto loans can add up fast if you don’t keep track of them. Now, during the world pandemic of the COVID-19 coronavirus (named after its shape), it is more important than ever that you stay financially literate. Publications such as Money magazine and its peers can give you ideas, but these ideas need to be put into practice, too. These articles from financial magazines may also help if you adjust your attitude toward money as well, which makes saving even easier. Now, what are some common financial pitfalls that you can avoid with careful money management, from buying nice shirts for pickleball all the way to hiring repair experts?
Personal finances can be a tricky topic, especially if you have obligations such as homeownership, having a family, opening investment portfolios, or owning your own business. But no matter how simple or complex your financial life may be, and no matter what you read in financial magazines, one thing is for sure: your attitude counts for a lot. If your perspective on money is healthy, you can unlock all kinds of options.
Here is one example: rewire your brain so that you feel good about saving money instead of spending it. As children, all adults learned to associate spending money with quick gratification, such as buying candy or similar treats. When a child gets money, their first thought is how to get maximum fun out of it, and when they grow older, this attitude scales up with them. Now, that person is spending huge amounts of money on anything from designer clothes to a classy motor vehicle to costly hobby items, and they may take out expensive loans to make those purchases. All this is because they equate spending money with happiness. So, you can save a lot during this quarantine by turning this habit around 180 degrees. Instead, resolve to save as much money as possible, and consciously take pleasure in saving cash and keeping track of how much you are setting aside in your bank accounts. Do this often enough, and it becomes your new norm, and the “buzz” you get when buying items or treats will soon vanish. Instead, a steadily-growing bank account gives you those good feelings.
Another financial attitude you can learn is to realize that some things don’t have to be expensive, such as diamond rings or the best fashion jewelry around. These things are nice, and women often inherit them from their mothers and grandmothers. But more and more young adults are deciding that the messages sent by these expensive pieces of jewelry can be expressed by other, much cheaper means, without tarnishing the message itself. When reading magazines about money, you probably won’t see too much about people spending huge sums of cash for “bling,” and for good reason. Flashy jewelry looks nice, but it’s all show. Instead, you and your loved ones can opt for personal experiences and homemade goods instead for just about any occasion, and that will save you a lot over time. Some men might give their girlfriends a bouquet of flowers in place of a costly diamond ring, for example, and host a small, intimate wedding under a party tent rather than a huge ballroom wedding.
Finally, a good financial skill to work on is gratitude for the things that you have. When reading money magazines, or hearing about very successful people like Mark Zuckerberg, you may notice that these people don’t always show off their wealth. Even if you don’t own Facebook or Disney, you can emulate this attitude of gratitude. More specifically, take stock of everything you own and remind yourself why you have these things, and determine how much value they add to your life. It’s also a good idea to keep a gratitude journal and make long lists of all things (tangible and otherwise) in your life and push yourself to write down all you can. Once all the good things in your life are laid out like that, you may realize that there’s no further need to keep buying things to fill up your life. Doing this not only saves you money, but it also cheers you up, since you find renewed purpose and value in all the items and relationships in your life. For many people, that joy can be worth more than any stack of cash.
A number of the financial ideas in money magazines presume that you are not wasting excessive money running your household. In fact, many American homes are costing their owners too much money because they are not efficient enough. Which utility is to blame? Often, the problem may be with the plumbing or the HVAC system. Bear in mind that for a typical house, the HVAC system uses up nearly half of all the electricity, and if the HVAC system is inefficient, this is going to cost a lot of money day in and day out. What can be done?
Climate control is a good place to start, and you can perform two system inspections of your HVAC system per year to make sure it’s in good shape. An HVAC system’s efficiency will suffer if the hardware is dirty or damaged, such as if the blower fans deep in the system are coated with grime or if animal nests are blocking the air ducts. Or, components in the furnace are burnt out, or air ducts have developed leaks. All this inefficiency forces the system to work overtime and use up costly electricity, so make sure you hire professionals who can clean, repair, or replace any compromised hardware right away. If the system is very old, consider having it removed entirely and replaced with a new one, since a new system is clean, in good shape, and built with modern electricity efficiency in mind.
On a similar note, be sure to keep track of upgrading windows and doors, since old, ill-fitting windows and doors tend to develop air drafts and thus disrupt the climate control. Having new windows and doors not only fixes that problem (and saves you money), but it boosts the house’s resale value when you put it on the market. Install blinds or shades for sunny windows, so hot sunlight doesn’t warm up the house and overwork the air conditioner.
Water might be the issue, too. Local plumbers can be found and hired to fix or replace just about anything, such as a leaky pipe that’s wasting water every day. Most American homes have leaky pipes, and all together, they waste a staggering amount of water every year. You may also have old toilets, faucets, bathtubs, or showerheads replaced with modern, low-flow models that save water over the long term.
What about optional features, such as security camera systems or anti-burglar hardware? Now may not be the time to buy an install such a system, but if you have one, you may as well keep it running. Your safety is important.
These financial magazines may also have advice on what to do if your financial situation becomes truly dire, such as if you are falling far behind on your mortgage and face foreclosure. In fact, foreclosure is quite common across the United States, and many surveyed homeowners report being terrified of the idea. Bear in mind, though, that most creditors would rather work out a deal with you than take your home; claiming your house is not their top priority. Be sure to carefully read all mail that you receive on this topic, and don’t be afraid to find and hire professionals who can represent you. If you sell off some items that you own and downsize your lifestyle, it may be possible to refinance your home and thus avoid having to put it on the market.
Suppose the worst happens, and your serious financial burdens become too much to bear. Now, it may be time to look up companies that offer cash for your home, and most states are home to many of these “we buy houses” companies. You will not get the full value of your house from them, instead just a modest fraction of it. But in such a dire situation, this is better than nothing, and you may ask an agent from these companies to inspect your property and estimate its value. From there, you can look for a cheaper place to live, such as an apartment, or any other option that you can take. Homeownership is a major accomplishment, but it is also important for you to recognize when a home has become a serious liability. It may be that years later when your financial life has improved, you are ready to buy a new home.
Everyone knows that hiring lawyers can be costly, and it may cost you fees just to consult the attorneys working at a local law firm. Should you hire one during the COVID-19 pandemic, when your job might be suspended? This will vary from case to case, and be aware that hiring a low-quality lawyer may be more trouble than not hiring one at all. A lawyer can be hired for just about anything, from representing you after you sustained injuries in a car crash, to helping you against wrongful termination or workplace bullying. You can even hire a lawyer to help you if you are the victim of bank levying or wage garnishing, which goes a long way toward protecting your financial life.
Going to the Dentist
During this public health crisis, is it a good idea to see your dentist? Most likely, yes. Your dental health shouldn’t have to suffer because of the COVID-19 pandemic, and an existing cavity or toothache is the last thing you need on top of everything else. However, be prepared to reschedule your appointments with your dentist, and be ready to adjust to their altered hours of operation. Also, when visiting the dentist’s office, try to arrive exactly on time, so you don’t spend any time in the waiting room, especially if you are already ill. This can help prevent other patients or the staff from getting ill and keeps the risks low.
The articles in online or paper financial publications often expect a “normal” set of circumstances, and the context of COVID-19 may change a lot for you. For example, now is the time to be careful and conservative with your money, and this is a poor time to risk money in investments or big purchases. Now is not the time to buy a house or a condo, even if your credit score is good, and even buying a new car or motorcycle is an excessive risk in this context. Overall, it is best to hold off on those plans until the pandemic is over or cancel them entirely. As for smaller, everyday expenses, many of them might not even be possible right now, such as eating out in restaurants or going to coffee shops or movie theaters. And once the pandemic is over, you might realize that you didn’t miss those expenses, anyway. This can provide a fresh new perspective on everything.
Many of the financial ideas in these magazines, and countermeasures against the economic impact of COVID-19, can be mitigated or handled if you are carefully tracking all of your expenses and income alike. Many Americans probably don’t know their net worth or their monthly expenses, but they (and you) can always find out. Set up a spreadsheet and note your income from wages, salaries, and passive income, and add up all expenses of all sorts. These expenses range from utility bills, rent, and mortgages all the way to car fuel, paying off student loans, cable services, and credit card payments, and you may be surprised by the total. If you are falling behind, then at least you will know it, and you can determine what to cut so you break even (or even get ahead). Tracking your money is a good way to diagnose and eliminate bad spending habits, and this can make it easier for you to determine how much you can afford to set aside for savings. This is known as “paying yourself first,” and it’s much easier once you’re tracking every dollar that goes in or out of your pocket.
Your financial life is no doubt affected by the current virus pandemic, from your job’s suspension to being unable to find a new job. But this is also a ripe chance to learn lessons about money management, from tracking expenses and paying yourself first to realizing that you don’t always have to spend money in order to find happiness. These ideas can help you not only during the pandemic, but in the years afterward, too.