Although there is now more hope than before that the U.S. economy is slowly recovering from the economic havoc caused by the rapid spread of COVID-19. Many jobs that flourished before the pandemic may disappear forever. In the best-case scenarios, they may take a long time to return.
One reason for this renewed optimism is the promise of a new vaccine. Although the news is still bleak, with many reports of a resurgence of the coronavirus, the news is now also peppered with reports about promising vaccine candidates proposed by pharmaceuticals around the world. American, German, and Australian researchers, for example, now have promising new vaccine candidates. The possibility of federal regulators approving an emergency use vaccine– since these vaccines have shown a high percentage of efficacy during clinical trials–increases every passing day.
In the meantime, American consumers still need to pay their bills and get some debt relief to stay financially solvent before pioneering pharmaceutical companies mass-produce new vaccines, governments distribute them, and the economy recovers. This may take a little longer than most people expect because of the logistical complexity involved in this entire chain of events.
While you are waiting for a return to normal life, here are some steps you can take to improve your financial situation now:
Reduce or Eliminate Your Debt Burden
If your debt, particularly your high-interest credit debt, is snowballing because of your compromised income, you might feel little to no hope of salvaging your financial situation.
Debt consolidation is a simple and effective method to reduce or eliminate your debt. All you have to do is get a new loan offered at a lower interest rate to pay off all your high-interest debts. Instead of writing numerous checks throughout the month to pay your bills, you will only write a single check once a month to pay down your consolidated loan. You will not only streamline your bookkeeping but also save money by paying less interest. You will also pay more toward the principal of your debt.
Track Your Spending Habits
You are probably spending money on things that you need not buy at all, purchasing things that give you only temporary satisfaction but do not add significant value to the quality of your life.
You can improve how you track your monthly expenses in the following three ways:
- Review your financial account statements. By frequently checking your various financial accounts statements, such as your checking account, savings account, credit card accounts, and so on, you will have a fairly accurate idea of how much money is flowing in and out of your household budget.
- Use a budgeting app. While there are many ways of budgeting your money, ranging from stuffing envelopes with cash to allocate your spending to writing your income and expenses in a ledger-like notebook, the most efficient way is to use an encrypted budgeting application. The problem with manual methods of budgeting is that you are likely to miss entries because you don’t want to carry your envelopes or budgeting notebooks with you wherever you go. You are also more likely to make calculation errors, which will skewer your budget. By comparison, a budgeting app automates calculations and allows you to access your records from any Wi-Fi device since all the information will be stored on the cloud. This means that you can access your app from your smartphone, your tablet, your laptop, or your desktop quickly, entering an expense right after you buy something at the store or online.
- Review your spending habits. Periodically spend a few minutes each week reviewing what you purchased. This will help you understand where your money goes. Since there are so many convenient ways to spend money quickly, it’s easy to lose track of the things you buy. Periodic reviews give you the time you need to pause and think about how you used your limited resources.
In sum, reducing or eliminating your debt burden and tracking your spending habits will go a long way in improving your financial situation in this strange epoch in history that you find yourself in today.