9 No-B.S. Tips to Emerge from the Pandemic Financially Stronger

Over the past few months, I’ve spoken to financial experts, everyday women and men from all walks of life and curated the best tips and practical actions you can take to emerge from 2020 stronger financially:Tip 1. Make a few strategic budget cutsFocus on :1) Large expenses that actually move the needle (that way you don’t have micro-manage an in-the-weeds budget) 2) Cut out the things that you find don’t add that much value for you.The truth is that the top three items in our budget usually account for the majority of our expenses. For most people, that’s their rent or mortgage, food, and transportation (in normal times). If you’re self-employed or freelancing, health insurance may be another top cost.Focus on finding ways to optimize these. Doing so can be more impactful than depriving yourself of a latte or movie. When I was in grad school I tackled my top expense categories by: -Rent: signing up to be the Resident Manager for my apartment building to reduce my rent-Tuition: signing up for Teaching Assistant positions to get tuition remissions/discount-Food: committing to 80/20 meal prep--making at least 80% of meals at home and doing advanced meal prep on SundaysFor many young adults, rent is usually the biggest expense. During Covid, a friend living in San Francisco, did some research on declining rents, gathered a few data points and negotiated a 24% rent reduction with her landlord. It never hurts to ask. Others I’ve spoken with have made decisions to take on roommates, move back home for a while or sell their car. The big expenses involve harder decisions but are often worth it to your wallet.********Tip 2. Letting go of social pressures to consume, gift, and spendIt's okay to remove the expectations and pressures around gift-giving.Nobody knows your financial situation better than you. If holiday spending and gifts will create stress for you, reach out to friends and family and let them know that instead of gift exchanging, you’d value cooking a meal together or spending some 1:1 time with them. You might also relieve their stress by talking about gifts. Sometimes non-consumption can allow us to focus on the people in our lives and reduce the strain on the environment as well.********Tip 3. Identify high-joy ways to save and do more with lessWhen you do take a look at your budget, try to be honest with yourself around the things that add value. If you really enjoy a particular streaming subscription, keep it. We don't need to live a monkish existence to save some money. But take a hard look at other spending areas - maybe ones you don't use or care about as much - and be willing to cut those.For areas of spending you don’t value as much, consider ways to get creative. If you don’t like your gym and don’t go often, you can you set up a home workout routine by using online videos or create your own routine. One person I spoke to uses elastic Therabands instead of weights (that can hook onto a door or window), does pushups and squats, and bikes outdoors.If you don’t mind using the library, many public libraries have apps for digital books and movie collections. It might be enough to cut down on some streaming services too.If you want to save on take-out and dining, try stretching meals when you order. Add your own vegetables to entrees to make the portions last for multiple meals (this cuts down the high levels of sodium too). For the rest of the time, make it a fun pursuit to test and tailor recipes to your own tastes by finding a few go to recipes you like and can meal prep.Each person’s preferences and values can differ so it’s not about judgment, just doing what works for you.********Tip 4. Increasing the buffer on your Emergency FundWhen it rains, it pours. If you’ve ever run into a series of unlucky events, you know how this feels. If you’re fortunate enough to be employed, try to add a few months of savings. It’s not always possible to do this so if you can, it's a good time to do so.If you do have the means to be able to save more, automate it as much as possible and keep your savings a separate high-yield account (to take advantage of higher interest rates) and make sure it's not easy to take money out of. For many of us, spending can feel much more fun than saving. But saving and investing can be fun too, especially when connected to a larger goal - whether that's a house, starting a business, or just living a little less stressed.********Tip 5. Staying the course on your investing plan in your retirement and investment accounts.For those who are investing their money, when the market is volatile, it’s particularly important to stay the course. The prerequisite here is to make sure you have 1) thought through how you want to invest your money (asset allocation) 2) selected good investment funds from reputable fund families at low fees (expense ratios) 3) have a diversified portfolio 4) a mindset of investing for the long-term (vs. short-term trading)Buffett said "investing is simple but not easy." Seeing the loss of your hard-earned money is a really painful process. Time is your friend and brings things into perspective: the loss is temporary if you're a long-term investor - in fact it may be an opportunity to rebalance into assets that are now cheaper. Over the history of the stock market, those who have invested for the long-term have done well.********Tip 6. Improve your credit scoreCall your credit card company and request an increase in your credit limit - the maximum amount of credit extended to you. Only do this if you pay off your bill in full every month and are already saving money.Your credit card utilization (your spending balance / credit limit) makes up about 30% of your FICO score. The lower it is, the higher your credit score. So increase your denominator to increase your score!Finance experts generally recommend keeping Utilization below 30% as a benchmark.********Tip 7. Making sure you have beneficiaries assigned for all your financial accounts.Make sure you have account beneficiaries assigned on all your major savings/checking, brokerage and retirement accounts.You can assign beneficiaries to your retirement accounts while for non-retirement accounts you designate who is the TOD (transfer on death) party. You can often split them among multiple loved ones if you want. Customer Service is there to help and it often takes just a few minutes to process these updates.Covid19 is stressful yet it might also be a good prompt to have these conversations with your loved ones.Set an annual calendar reminder to go through your accounts to:1) Make sure you have a primary and contingent beneficiary (or TOD) for each2) Update beneficiaries as your life circumstances change (e.g. marriage, children, etc.)3) You can keep your beneficiaries in the loop by creating a simple document that lists your accounts, what institutions they’re held at, and the assigned beneficiaries.********Tip 8. Reviewing your insurance policies to understand what’s in them and if you can get a better rate.Insurance can be a great business model, but may be tough to collect on given policy nuances and deductibles. Take the time to review your policies and understand what’s in them. Call or email your insurance company with questions if anything is unclear. If you hold multiple policies, consider calling your insurance company and seeing if they can provide a discount if you move them all under one provider.********Tip 9. Network to identify new opportunities and gather data on your market value.Many people are transitioning between jobs or are uncertain about compensation in 2020. Keeping tabs on your market value is smart and can add up over your career.Regularly assess and communicate your worth so it translates to your earnings. Here's one approach shared by a recruiter I spoke with:Step 1: Build a peer group of 3-5 trusted people to share market data. They can be peers in your industry, mentors, hiring managers, and recruiters.Step 2: A few times a year, check in with them: “I’m renegotiating for a raise. What salary range have you seen for my role?” or “I’m looking at a new role. Do you know any recruiters I could chat with about salary expectations?”Step 3: In tough times, many are worried about job security. If you’re lucky to be in a good position and performing well, it pays to set expectations with your manager on a regular basis.Step 4: Communicate your performance, salary expectations, and an agreed upon timeframe to revisit the topic if your company is paused on promotions or salary increases.When it comes to money & finances, I know many of us are starting from different resource levels and facing different challenges, so these ideas aren’t meant to be one-size fits all. These ideas aren't meant to make anyone feel bad - we are all doing the best we can, with what we have, where we are.Let me know what you think and DM with any questions.********A bit about me:I’m Yaya and I’ve spent the past 10+ years as a student, practitioner and mentor on the topic of personal finance & investing. I run a Personal Investing course that’s been taken by employees and students at orgs like Google, LinkedIn, American Express, UPenn, Berkeley, and Cornell (https://oyf.teachable.com/p/personalinvesting/)I share personal finance tips and ideas on Instagram @oyf_investing and through my free newsletter: https://oyfinvesting.ck.page/98d7b7e047

9 No-B.S. Tips to Emerge from the Pandemic Financially Strongerhttps://oyfinvesting.ck.page/98d7b7e047

9 No-B.S. Tips to Emerge from the Pandemic Financially Strongerhttps://oyfinvesting.ck.page/98d7b7e047