I read this blog post title, steps to improve my finances in 2020, from another post but then realized that I have a decent plan myself. I didn’t read the post before writing mine. I didn’t want to be swayed from what I had already pre-planned.
2020 started out well for me! I accepted a new job offer, secured a few key clients for B Chic, made Etsy sales, and made major progress on my real estate sales license coursework. These are all positioning me for a successful latter half of 2020 and beyond.
Coronavirus Will Not Ruin My Finance Goals
This has been a trying and unpredictable time globally, though. People are losing income, fearing for their health, and faith in a brighter future. I’m praying that you’re keeping your spirit up and positive. We’ll get through this together, but it’s important that you speak up if you need help.
We can’t forget that life will go on. History has shown that it repeats itself, and we will weather this storm. For now, all we can do is hope and plan for life after the pandemic. So, with that in mind, I’ve come up with my top financial goals for my best life after COVID-19.
Improvement #1: Emergency Fund
I’ve never been able to save over $1,000 outside of a short-term goal. Naturally, my best savings record was for my wedding and I was able to put aside close to $4,000 for our expenses.
Life has taught me savings can come in handy in so many ways. My past has shown that I am very good at using a credit card. I’d probably be considered a great customer based on my track record. High balances, on-time payments. I kept a lot of people employed. You’re welcome. But when I decided to quit my chronic credit card spending, I had to find the funds somewhere else.
Not only does regular spending have to depend on my checking account, but so do emergencies. I hate having to allocate money in my budget for an emergency, I’d rather be able to pay for it upfront and be done with it. That’s where savings come into place.
To take this to an even higher level, I realized that I like having a high savings balance. Using those funds for emergencies depletes it. So, what’s my solution to this? My goal is to build a base emergency fund of $1,000 that I don’t touch. Over time, the overage savings will be used to cover emergencies and I’ll always have that cushion.
I know this isn’t a novel idea, but as a recovering CC spender, I’m making major progress.
Improvement #2: Credit Card Debt
I can remember the exact dates that I put myself into credit card debt, from August 2012 to August 2019. Last year I consolidated all of my debt and finally started to tackle it strategically. I also had a failed attempt in December 2017, but we have learned and moved on. One of my major life goals for the past three years (at least) has been to get out of credit card debt. I knew this time was different when I completely paid off four accounts in less than a year. The other four accounts haven’t been used in almost a year and I’m making steady hefty payments.
I think the most influential mental shift was remembering that I have the funds for what I really want. Sometimes I have to wait to make a purchase, but everything I TRULY want or need is in reach. Secondly, making small sacrifices to make extra debt payments will allow me to reach debt freedom a lot sooner.
Improvement #3: Retirement Saving
Being a few years from 30 puts me in the perfect position. I am still in the ideal age range to start a consistent retirement savings plan that will yield desirable results. I’ve participated in the 401(k) plan with all my jobs and took advantage of the match. When a match wasn’t provided, I saved on my own. My goal is to save $5/day. This simple goal provides a structure for my investment budgeting.
My favorite investing program for my IRA, separate from the 401(k), is Ellevest. This is where I make my $5/day contributions.
What about the credit card debt?
I’m glad you asked. While listening to this episode of the So Money podcast, I decided that the best for me right now is to focus my investment payments to debt until all credit card debt is gone. Once that’s done, I’ll go back to making my $5/day contributions.
Improvement #4: Car Refinancing
I was very proud of my car purchase in 2017. I didn’t need a co-signer and I put a nice downpayment on the car. I also signed up for a mechanical repair and roadside assistance program that lasted for the first three years.
Now that I am nearing my three year anniversary, my monthly payments will decrease. Why not push that further? I’m going to refinance my car with another bank or even the same bank. This will allow me to pay my car off faster (currently in a 6-year term) and save money.
Improvement #5: Real Estate Side Hustle
I had a quick stint in property management while in graduate school. I started to enjoy it until I received a job offer in my degree area. So, I abandoned the real estate industry to return to music. However, my love for it never ended.
Moving to Texas in mid-2019 provided an opportunity for me to change the trajectory of my career. Although I did not jump right into real estate, I at least started my coursework. My goal is to complete my pre-license education by mid-year and conduct home sales and renting on a part-time basis later this year.
I love the flexibility of a real estate career and the earning potential is amazing for part-time. $8,000 is the average extra income a part-time real estate sales career can provide. Not too shabby.
Are you interested in starting a real estate sales career? Check out the CE Shop. They have required education online programs for most states and I love the platform.
Improvement #6: Spending on Personal Care
When I started to wean myself off of credit card spending in 2017, I cut back on almost all personal spending. I bought only the basics and it took me a long time to “splurge” on clothing, accessories, and luxury personal care. I’m finally at a point where my savings are growing and extra spending cash. Late 2019 was my breakthrough time for realizing that personal care is important and I should not feel shame in spending on myself.
Improvement #7: Long-Term Goal to Cut Expenses
Most recently I came up with a bright idea to increase my steady income and cut my expenses. How will I measure the success of this? My goal is for my monthly expenses to equal one paycheck for the month. That essentially frees up a full paycheck for additional savings, investing, and short-term savings for larger purchases.