You’re far from alone if the idea of revisiting your 2020 financial performance makes you shudder. After all, it wasn’t an easy year for anyone (except maybe Jeff Bezos and Elon Musk). Fully 62% of US adults report falling short of their 2020 financial goals while two-fifths of households say their income has not recovered from the pandemic’s initial blow. Looking back on such numbers won’t be fun but, just as athletes review their losses in painstaking detail, so too should you look at where you fell short last year so as to not repeat the same mistakes this year.
Step 1: Take Stock
The first thing you need to do in order to recover from the shock of 2020 is gather all your financial statements and aim to spot anything that’s off. Did you spend more in April than ever before? Maybe it was all that quarantine comfort food, or the seven thousand toilet paper rolls you bought in a panic. Or, maybe it was the surprise travel expense to ensure you could shelter at home with family. Whatever the cause, make note of irregularities and think about how to avoid them moving forward.
Alongside rooting out hiccups in your spending, you should review savings and retirement accounts. If they’re not where you would like them to be, don’t stress—no one foresaw the pandemic, after all—but make sure to include a fix in your 2021 plan.
Step 2: Budget
Once you’ve done the painful work of sifting through last year’s records, your next task is to put together a budget that reflects your expected income and expenses for the coming year. Set goals, both long-term and short and allocate resources accordingly. The simpler your aims, the easier they will be to achieve, so keep it straightforward. Ticking one goal off your list motivates you to go after more, which is why realistic planning is essential.
Step 3: Look Beyond Finances
2020 was not just full of lessons in financial management. The year exposed holes in all aspects of our planning. One in special need of attention is your estate plan. If after all that has happened you still don’t have your medical and financial powers of attorney in order, now is the time. Likewise, if you haven’t made a will or revised your home, car, and life insurance policies in light of pandemic-provoked changes, you should. Often, attending to such tasks is less stressful than financial planning but equally effective at motivating you to get the ball rolling.
Step 4: Don’t Give Up
Last year was hard and the start of this year promises more of the same. There is no shame in struggling right now. Millions are in financial straits and millions more will be before the pandemic is over. Your best line of defence is to simply keep going. It may be that your savings goals for 2021 are no more than a fraction of what you had hoped for and yet the mere fact of having them is a victory.
While resources are tight for many, if seeking professional help fits your budget, now is the time to do so. After all, the web of stimulus measures, new legislation, slashed interest rates, and adjustment to insurance policies means that investment and savings opportunities exist among the wreckage. Capitalizing on these is a great way to get your financial planning back on track. An estate planning attorney with wealth planning and preservation experience can point such opportunities out to you and provide counsel concerning which are best suited to your aims. And while they’re at it, they can also help you get those medical and financial powers of attorney off your list!
Contact the Estate Planning Attorneys at Deliberato Law Center
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