Everyone can agree that 2020 was a year like no other. It changed the way Americans handled so many areas of life, including the way they managed their money.
Now, some of those classic finance rules you’ve heard your whole life no longer apply.
“A pandemic again is going to make everyone think that they’ve really got to have their finances in order, particularly to have some cash on hand,” said Joel Garris, president & CEO of Nelson Financial Planning.
The first rule you can throw out, having a three-month emergency fund. The new target for most households is at least six months’ worth of expenses and more like 12 months if you’re self-employed.
Maxing out your retirement contributions is another rule to forget. You shouldn’t sacrifice your ability to afford essentials, only contribute what your company matches.
Also, pay down high-interest debt first.
Paying with cash only is another money tip you don’t have to follow. Some credit card perks can help you save money and protect your purchases.
You may have been told to check your credit report once a year, but experts say you might want to look at it monthly. The major credit bureaus are offering free weekly reports through April 2021.
You may have heard that you shouldn’t invest money until you’re debt-free. Now, experts suggest continuing your debt payments but setting aside a little money for investments if you can afford to do so.