2020 was a rollercoaster — one of those uniquely sadistic ones where you spend the whole ride upside down and plunging. Alas, 2021 isn’t shaping up to be much smoother: COVID-19 is still wreaking havoc on the country, with the death toll nearing 470,000 in the U.S.; new strains of the deadly virus are emerging and Wall Street has been upended by Redditors. All these factors are straining our lives both psychologically and financially, all while teaching us a shocking lesson: In times as unstable as these, you can never have too much money in your savings accounts.
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This is why it’s time to start saving for 2022. That might sound dreadful, especially if you’re barely getting by right now. But financial experts stress that financial planning for the years ahead is crucial. Here are some key insights on why saving for 2022 matters so much in 2021.
To Take Back Control of Your Finances
“Don’t let your finances rule you and determine your life decisions,” said John Davis of ScoreSense. “Without you, in control, your future and possible opportunities will be limited. Although it may seem daunting, especially if you have accumulated significant debt since the start of the pandemic taking back control now will help you achieve financial stability in 2022.”
Davis recommends assessing your current financial situation by listing assets, debt, savings, income and expenses, noting that understanding your current position will allow you to put together a plan to be well placed financially in 2022.
To Have More Time To Reach Your Goals
Timing is everything, as they say, and saving money can take a lot of time! “By starting to save now, you are giving yourself more time to reach your 2022 savings goals,” said Carol Tompkins, Business Development Consultant at AccountsPortal. “There will be less pressure to achieve your 2022 financial goals if you start early and start small. In other words, it will be less of a strain financially if you start saving now rather than towards the middle or end of 2021.”
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It’s The Best Way To Prepare For The Future
“Having a savings account can act as an emergency fund that can keep you financially stable when unexpected costs or emergencies arise,” said Tony Wahl, director of operations, Credit Sesame. “Saving isn’t easy, especially if you’re like the many Americans living paycheck to paycheck, and it can take time to build up a nest egg — so it’s important to start right away.”
Wahl added that when you’re thinking about saving, it’s important to make sure that you pay your bills on time and cover your essentials first. “Missing bill payments can have a detrimental effect on your credit score which can result in you paying higher interest rates in the future, so making at least the minimum monthly payment on your bills is number one.”
To Pave The Way To Financial Success (Or At Least, A Less Painful Struggle)
“Financial success always comes after a good plan is put into place and action is taken,” said Kelan Kline, a personal finance expert, The Savvy Couple. “Right now we are living in unprecedented times and planning for the unknown of the future is a must when it comes to your finances. Planning at least a year ahead with your finances is always a good idea.”
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By preparing for the future you can also prevent yourself from financial struggles when an emergency happens, “such as a job loss, car repair, or loss in the family,” said Kline.
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