You are your biggest asset. You are your own money-making vehicle. The more you invest in yourself through education, training, and other means of adding value to your personal brand, the more you increase your earning potential
Photo credit: Anna Shvets
Nearly everyone is being hit hard by the economic crisis caused by COVID-19, including people in their 20s just establishing themselves. During these weird days under the dark cloud of the coronavirus, it might seem impossible to launch a career or set yourself up financially. But the reality is that time waits for no one, even under quarantine. In fact, during a crisis is when your hustle is most needed.
The financial wisdom underlying basic career and financial literacy did not suddenly change in March 2020, and global economics won’t change the common-sense money practices you should be employing. Thanks to the advanced technology that’s made financial apps and software available, reaching your career and financial goals might be easier than ever, now and beyond the time of quarantine. Let’s take a look at some concrete steps you can take during the COVID-19 pandemic to step onto a steady path to success and financial stability.
Make a budget and stick to it
Coronavirus or no coronavirus, budgeting is the most tried-and-true financial wisdom you’ll find. You must be aware of what you spend if you ever hope to gain control of your financial situation. So why don’t most people stick to a budget? The same reason we don’t stick to a diet: We want to do what we want, when we want, with no consequences. That simply doesn’t always work in the world of money.
Managing money takes self-discipline. You are grown now, probably on your own, earning your own money. No one is standing over you, bossing you around about your money. So you need to boss yourself around. The budget is the tool you use to make yourself follow your financial plan. Think of the budget as your money boss. Set it up, then do what it says.
If you find it hard to discipline yourself, check out the many budgeting apps you can connect to your account. These apps will remind you of your goals and notify you when you are getting off track.
Get smart about your credit
You might think you can put off thinking about your credit until you are ready to buy a house, but you would be wrong. Long before you’re ready for big life purchases, you need to start building, maintaining, and monitoring your credit. Good credit doesn’t happen on its own, and it doesn’t happen overnight.
The first step in building healthy credit is to monitor, monitor, monitor. You cannot afford to ignore your credit rating. There are plenty of free credit-monitoring sites that you can use to keep an eye on your credit.
The next most important step is to use credit wisely. You might think that never using credit is the best way to avoid messing it up, but that isn’t true, either. You need to build a credit history that shows you are actually using credit, but correctly. This means taking on a few accounts, slowly, and then paying them religiously. This is the smart way to build a credit history.
Don’t forget about taxes
Do not ignore your tax obligations. Even if you work part-time or are self-employed, making errors or getting behind on your taxes can have repercussions that might haunt you for years. Pay attention to what you make, learn to calculate what you owe (again, apps can be your best friend here), and file your taxes on time every year.
Invest in your brand
You are your biggest asset. You are your own money-making vehicle. The more you invest in yourself through education, training, and other means of adding value to your personal brand, the more you increase your earning potential — aka, the single most powerful financial tool you have.
Not only can you invest in yourself through training and education, but you can also invest in yourself through self-promotion. Never underestimate the power of promotional items and activities. When you’re just starting to build a list of contacts in your chosen career field, you need all the connections you can get. Cultivate new client relationships with the help of branded promotional items bearing your contact info or logo.
Get creative
If your first choice of career doesn’t take off right away, supplement it with side hustles. There are so many ways to make money on the side and online these days that the word “unemployed” should really be reconsidered. Perhaps you’re not working in the job you want, or maybe your job has been put on hold by a virus-related quarantine, but that does not mean you can’t earn money.
Limit your expenses
When you first experience the joy of receiving a steady paycheck, it’s tempting to start spending that hard-earned cash. After all, another check will be coming along soon, right? Unfortunately, it doesn’t take the economic devastation of a pandemic to point out the flaw in that logic: Even at the best of times, the job market is fickle, so you should keep spending down to save as much as you can.
For example, to limit your expenses when it’s time to purchase a vehicle, consider buying a stick shift to drive instead of an automatic-transmission car. They’re cheaper to buy, break down less often, and are cheaper to fix. Plus, in a stick shift, you’ll be a lot less likely to text and drive, which can save you money on tickets — and could also save your life.
Invest in a fixer-upper
You might want to practice a similar concept when buying a home, To build equity and cut costs, look for a fixer-upper. Renting a ‘dumpster’ is plenty affordable these days, so clear out the old furnishings and start the basic renovations yourself. (There are lots of tutorials on YouTube.)
You might have to rough it for a while, but your efforts eventually will pay off in a home that’s all yours at an affordable cost. If that house does not prove to be your dream home for the long term, you can always live there temporarily and then sell it for a profit. House flipping has turned many people into millionaires over time.
Pay attention to the fine print
Finally, your financial enemy is lack of attention. “The road to ruin is paved by many people with “financial ADD” who overlooked costly elements in contracts. When you’re signing a contract, be it for a car, a house, an apartment, or even a cellphone, read the fine print. Pay attention to what you’re signing if it involves your money, your time, or your rights in any way. If you don’t like (or don’t understand) something you read, stop and ask questions. Ask for a better deal or, if necessary, take your business elsewhere.
Don’t believe the panicked voices that tell you, “Stop everything because the world is ending!” It’s not. Things are definitely changing right now, and people are going to need to think outside the box to accomplish their goals. You can do that. The financial basics are still the basics, and they still work.
Author: Ann Lloyd, Student Savings Guide
