How to Tackle a Challenging New Year…

Head-on!  Yes, you heard that correctly…there is no better time to face all the challenges that will undoubtedly be foisted upon us from that so-called lousy year named 2020!  I’m sure all of you are happy to see it go by the wayside, as am I.  But with all challenging things, it is never a good idea to sit around and feel sorry for yourself or worry; or to even sit idly by.  The best thing to do is to strap on your gear and face it head on!

This year, I believe we will see not only many changes in the United States.  From the struggles of 2020 with Covid-19; layoffs, closed schools, closed businesses, increased medical care (cancelled benefits), increases in grocery costs, et. These things have not been promised to get better in 2021, only worse (in my opinion).
The new White House Admin started the first week with cancelling 60 thousand jobs (estimated to be as high as 100K), wiped out the tax cuts, promises to increase income tax, increased the recently cut prices of Insulin (and reversed it to protect big pharma).  So the outlook is not good.  It may not be horrible, I’m not going to say it is all doom and gloom, but so far, it’s not looking good people.  So we must prepare for all situations.  One thing I do know is people are struggling financially.  According to the National Consumer Law Center (Fall 2020 Newsletter), the projections for many consumers is they will face tremendous financial distress as a result of Covid-19; staggering unemployment, and increases in everyday living expenses, such as food, clothing, medical, transportation, et effect us all.

Remember, a lot of the Federal moratoriums from 2020 were lifted (mortgage deferment, et), and we may begin to see an increase in foreclosures and evictions.  As current restrictions are removed, many people will be at risk of losing their homes.  Over 7% of adults in the United States report they are behind on their rent or mortgage payment, or have slight to no confidence they will be able to make their next payment on time. As many as 225,000-50,000 homeowners may face foreclosure through 2021. Black and Latino communities, who have been hard-pressed with Covid-19, are facing even greater risks of default. Unless Congress takes further action, we may see 2021 be even more economically challenging than 2020!

So what can you do?  Start by making a simple budget and see exactly how much income you have coming in and exactly how much you have going out.  This will immediately tell you whether you need to go get another job or create another stream of income to help with increasing expenses. (If you need a simple budget form, contact Credit Builders and we will send you one absolutely free). 

Take a hard look at where you’re leaking extra money.  The great thing about budgeting is that if you are honest and mindful of your spending, it can give you a picture of exactly where your money is going and where you may be able to instantly reduce expenses. It can be a bit uncomfortable, especially for couples, to sit down and work together, especially if one of you has always been the “financial” person responsible for managing the household finances.  But if we’re talking about a survival, or perhaps losing the roof over your head, then you must take action and be honest.  In the end, you may even have fun doing this…as debt gets reduced and “paid off”, you may even see your savings increase.  Then, rewards become exciting!

There is an app for that…There are APPS for nearly anything you need to help you.  Budgeting, accounting, bill paying, calendars, reminder apps, grocery list apps, et.  Look for “free” APPS.  Why do I suggest free?  Because remember, you don’t want to leak extra money, and APPS are definitely an area where you can easily spend $5-$100 per month.  These sneaky (but fun) little buggers can really add up! So go to your settings on your phone, click on “APPS & Subscriptions”, and take a look at how many you signed up for, the cost, and their renewal periods.  Add it all up and see if there are some you can give up. Your phone will be lighter and so will your expenses!

If you do find yourself in default, pick up the phone and call your Mortgager.  Let them know what is happening.  There may still be some programs that have been extended that can help until you get back on your feet.  Remember, nobody wants to see you be homeless.  Your lender does not want to take the asset back, it’s not in their best interest.  Always communicate with any creditor and see if payments can be deferred, interest temporarily stopped, payments lowered, et. You may be surprised at how willing they will be to work out a payment agreement.

Check your Credit Report!  Nearly 80% of all Americans have at least one negative item on their credit reports that will cause them to at least drop 20 points on their FICO scores.  This can result in being denied a much needed loan, job, insurance, or car loan.  Credit Builders suggests checking your credit report quarterly, as mistakes, merged files, collections, charged-off accounts and  identity fraud are either added or updated monthly. Credit Builders sponsors credit monitoring in our credit restoration plans. But if you would like to check your reports, you can get a Vantage 3.0 tri-bureau credit report with scores from Smart Credit, which is a comprehensive three-bureau report.  The best thing is also it will not effect your credit score! 

If 2020 taught us anything, I believe it taught us to assess what is truly important.  It has taught us to value not things, but people.  Our family, friends, pets, co-workers and associates.  Our homes! The simple things in life that bring joy, not strife. Some of us have learned to cook!  We’ve once again have family dinners, play games, enjoy each other’s company, even if it is through Facetime or by phone.  So even though we may have more challenging times ahead, remember to lean on these people you have gathered close. Don’t be afraid to express yourself. To talk.  Let people know if you are struggling a bit. There is always someone who will be willing to listen…to help.

Credit Builders will always be willing to help you-consultations are always free!  Credit Builders wishes you a very Happy and Prosperous New Year!

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