We are facing financial challenges today as never before and we’re just not sure how we’ll ever be able to dig our way out of it or if we will ever be able to retire. What does the future hold in the “new normal” that we’re all facing?
Honestly, if this worldwide pandemic has taught us nothing else, it’s this: regardless of your earnings, whether you make $40,000 or $400,000 a year, you’ve got to have a plan for the future! And I’m not talking about a comfortable retirement, either! Especially when most of us weren’t even prepared for the financial emergency that this economic shutdown created. For many of us, it’s going to take a very long time to recover from these weeks or months of staying at home.
Exactly what caused us to get in the mess that we’re in? Why weren’t we saving? Why do we have so little in retirement? Where is our emergency fund?
- Truthfully, we are drowning in debt! Did you know that the average American citizen carries $168,000 on their home mortgage, $27,000 in car loans, and a whopping $10,000-$15,000 in credit card debt? And those with student loans? $48,000. The interest alone on that much debt is substantial!
- We’re taxed to death! The average American citizen pays approximately 24% of their total income in some sort of tax. That includes income and payroll taxes, sales taxes, property taxes, vehicle taxes, and so on. And every year, that figure rises! Just wait until the TRUE cost of this pandemic hits our tax bills!
- The average American is unable to save at all, but if and when they do, it’s usually only about 2% of their overall gross income. Imagine 2% of your last paycheck. How long would it take you to save an emergency fund at that rate?
So, what can we do? Realistically, if we’ve learned anything at all these past few months, it’s that we really don’t need all those expensive extras in our life! Take a look at what you used to spend at the coffee shop every morning. You’ve made your own coffee lately, haven’t you? What about the gym? Haven’t you been exercising at home just fine since it’s been closed? Maybe you really don’t need to eat out as much, either? Or shop as much? What else have you learned to do without? Add it all up… is it $200 a month? More? Less?
Even if your savings is only $50.00 a month, start saving it now. Before you get back in the habit of driving through the coffee shop every morning. Before you abandon your daily walk or run for the gym. Before you eat out every night instead of cooking at home.
Old habits have been broken. Embrace the new normal. Learn from it. Use it to build a new lifestyle. One that enables you to build on your financial future, save money, and be better prepared the next time the world comes crashing down around us!