Source:theconversation.com

Time to Fix Personal Finance Management in 2021: What Mistakes to Avoid and Tips to Follow

The material side of life is important for a person. Not everyone boasts a high monetary level, the reason for which is improper financial behavior. Many do not even try to put aside savings, citing small incomes.

Of course, to improve your financial condition here and now, you can use PersonalMoneyService for emergency loans for bad credit. They will issue credit funds in a matter of minutes, and you will not need to worry about your credit history. Meanwhile, the secret to successful management of personal finances lies in the ability to control their expenses.

What Affected the Deterioration of the Financial Condition in 2020

Source:baylintech.com

Pandemic. 2020 has become a challenging year for everyone, both financially and morally. The pandemic forced us to face situations in which we had not yet been; many began to work remotely, schoolchildren and kindergartens remained at home, socialization was reduced to a minimum.

This all impacted economic processes: many felt a significant decline in turnover and were forced to reduce workers. Citizens had to reckon with a decrease in income. Especially when you had to face illness, vacation at your own expense or lost work. Tensions in personal finances also became natural, as there was great uncertainty and uncertainty about how strong the impact of the pandemic on the state economy and the financial situation of families would be.

The impact of the pandemic on young people in 2020. The latest study by the International Labour Organization on the impact of the COVID-19 pandemic on the labor market on its devastating effects on young workers, as well as on measures taken to ensure the safe return of people to work.

Since the outbreak of the pandemic, COVID-19 work has stopped more than 1/6 of all young people in the world, and for those who continue to work, the amount of working time has decreased by 23% (behind the ILO data).

For young people, the pandemic was a triple blow. It not only deprives them of employment but also disrupts education and training, as well as poses severe obstacles to those who intend to enter the labor market or change jobs.

Loans. COVID-19 has become a financial burden for Americans. The number of borrowers has increased several times. More and more citizens applied for personal loans. First of all, this was done to pay the bills. Loans were also made to repay previous loans. This has become a credit funnel for many.

Source:medium.com

People began to take loans due to the loss of their previous place of work. According to a survey by The Ascent, a reduction in working hours affected 41% of Americans who lost income, and 28.3% were completely dismissed from work.

We have already had enough time to be glad that 2020 is finally over. For many, it was a year of financial difficulties — illness, lower salaries, layoffs, the bankruptcy of companies, the ruin of small businesses. But the 2021st in itself will not bring relief and success if we do nothing.

Mistakes to Avoid and Tips to Follow

If we were taught something by 2020, it is that the unexpected can happen to each of us at any moment. We will never be able to fully appreciate the importance of having savings until we need them, but do not make a mistake thinking that this is not necessary. Therefore, to help you, we have listed nine common errors to pay attention to when planning your 2021 budget.

Mistakes Tips
1 Spend more than you earn The best tool to help you avoid this error is to create a monthly budget. This will help you understand precisely where your money goes and where there may be room for saving.
2 Do not defer for a rainy day Financial advisers usually recommend having enough savings to cover costs for three to six months. Savings should be readily available and generate income corresponding to inflation (minimum).
3 Fear investing It is never too late to find out how to make your money work for you with magic, which is complex interest: adding interest to the principal amount of a loan or deposit, or, in other words, interest on interest.

 

If you are new to investing, it is necessary to carefully study the question or contact a specialist to assess the risks and gain an understanding of how investing works.

4 Have only one source of income Income diversification is a great way to make more money and reduce risks if you lose your job. It can be anything from delivering food in the evenings to selling services on the Internet, such as copywriting or language training.

 

Creating something that gives you a passive income will help you earn money in the background without affecting your ability to work or the time to do so.

5 Do not set financial goals People who do not have clear financial goals tend to spend spontaneously and hope for the best. Such an approach may be futile, so the best approach would be to clarify your goals and then formulate a plan to achieve them.
6 Do not plan your budget Budget planning leads to a more rational treatment of spending. Such a simple tool can create miracles for those who are used to uncontrolled spending. Budgeting will allow you to more clearly identify where your money goes.
7 Credit abuse and debt pit The main tips in this item are:

1.  control the number of debentures;

2.  select only a proven lender with a flexible debt repayment system.

When making a loan, study the loan agreement’s terms and remember that the borrowed funds will still have to be given away.

8 No desire to earn more You need to set high goals and try your best to achieve them. There’s nothing worse than inaction! Even an unsuccessful attempt is much better than complete indifference. Try to grow financially – and you will feel completely different.
9 Misperception of finances The money will never leave a caring owner. Need to:

·         value money;

·         it is right to talk about finance;

·         it is reasonable to dispose of capital.

Source:thebalance.com

We hope that by reading this article, you will avoid financial mistakes in 2021, and your life will be secure, comfortable, and happy.


Ricardo is a freelance writer specialized in politics. He is with foreignpolicyi.org from the beginning and helps it grow. Email: richardorland4[at]gmai.com