It’s been a year since the world turned upside down. Although the light is shining at the end of the proverbial tunnel, we still have a little ways to go before we can breathe a collective sigh of relief and get back to what will be our “new normal.” While we wait to be vaccinated, it is worth the time to review some of the financial lessons we learned in the last year in regards to living within our means, always having a safety net, and making sure your family is protected with the right insurance.
The year 2020 taught us all something about ourselves and the people around us. We have learned patience, kindness, and to never again take for granted the joy of a hug from a friend or family member. But amid all these personal revelations, we have also learned some hard lessons about finances and insurance that are worth a review. Here are three lessons that can help us in the days to come.
Verify You Have The Right Insurance
Many of us know that we should have car insurance, homeowners insurance or renter’s insurance to protect our valuable possessions. But many Americans have put off getting life insurance that could protect your family in the case of your sudden passing.
Nearly a half a million families in our country alone have an empty seat at the table where once sat a cherished member of the family. If that family member was relied on for an income to contribute to the family’s finances, they have not only left an empty emotional spot but a financial one as well.
If this year has taught us anything, it is that life is fragile. If something happens to one of the breadwinners in your family, how will you handle the mortgage payments, utility bills, debts, such as car loans, credit cards, and student loans? Life insurance can be one such method to stabilize your family in case the unthinkable does occur.
Create a Safety Net
Starting last April, the United States economy took a massive nosedive. Millions of Americans were laid off as a result of the pandemic. That alone has caused ripple effects throughout the country.
As of February of this year, 1-in-6 families with children lack sufficient food for their families. Nearly 1-in-5 renters are not caught up on their rent. And 1-in-3 adults had trouble buying usual household needs for their family. This is only a small snapshot of the suffering that is happening all around us.
One thing that many of us could have used during this time was a cushion or emergency fund as a safety net when jobs were lost. Unfortunately, too many Americans live paycheck-to-paycheck and have no means to save a little nest egg for a rainy day. That is why congress needs to act to help so many of us recover from this financial storm.
In the future, when things have improved financially, it may be smart to consider a way to start saving emergency funds that can help your family in the case a storm of this magnitude comes again.
Live Within Your Means
Sure, it’s great to have the latest smartphone or newest devices out there. But too many of us have been living just above our means for too long. A lesson we can all take away from this tragedy is learning how to live within our means.
According to financial experts, setting up a budget for your family and following some simple rules can be a lifesaver. Mint suggests using a family budget app and keeping your spending in line with that number every month. For more on the 50/30/20 rule of budgeting check out this link.
What financial lessons have you learned in the past year? While many of them may have been difficult and caused major hardship for your family, we can still learn from them and more forward in our lives financially speaking. For help with organizing your finances or getting started with life insurance to protect your family, check out these resources.