HILLSBOROUGH COUNTY — The pandemic has turned people's financial lives upside down. According to one study, millions of Americans who lost their jobs during the pandemic have fallen about $5,000 behind in their bills.
Whether you’ve been downsized or you're drowning in debt, there are five steps you can take to get back on better financial ground in 2021.
Best Selling personal financeauthor Chris Hogan knows people are struggling. He advises consumers to take 5 steps to boost their bottom line and beat down debt in 2021.
First, Hogan says fix your focus on what you can control. “I am talking about our spending. I am talking about us understanding the difference between a want and a need.”
Next do what it takes to scrape up a small emergency fund. Hogan suggests setting aside $1,000 for emergencies. “That is where you are going to sell some stuff. Take on an extra job that will allow you to stop using debt and set some money aside when life happens.”
He points to openings for food delivery jobs and at companies such as Home Depot, Amazon, FedEx and Target.
Step three, up a simple budget. Hogan recommendsDave Ramsey’s budget. The site is free and quickly lets users assign every dollar of income so you can identify areas where you might be overspending. “This is what I have in rent or this is what I have in a mortgage payment, this is what I am going to spend on groceries, so it is going to give you more control,” said Hogan.
Number four, pay down debt but only if you are able. For those dealing with a job loss or cut in hours, Hogan says to focus on covering the basics.
“If you have lost some income you are not going to be able to make extra progress on debt, you are going to have to take care of the four walls first; food, housing, clothing and transportation.”
Step five applies to consumers who can tackle debt. Hogan says the snowball approach works best. “You are going to list out the debts smallest to biggest and you are going to make minimum payments on everything else. If your income is stable throw money at the smallest debt and you are going to find you are going to get out of debt faster.”
Chris tells consumers to tackle the smallest debt first -- no matter the interest rate – because it is about momentum. After you pay off the small debts start paying down on the larger ones. You’ll find more resources and tools here.
