Gerry’s 2021 Outlook: Staying Financially Fit in 2021
Written by admin-kidglov on January 11, 2021
Who doesn’t love the prospect of a new year? For me, the idea of that annual reset is exciting, motivating and full of possibility. And this year? Well, let’s just say that most of us are pretty eager to see the end of 2020.
But as challenging as 2020 has been for many reasons, it’s left us with a lot of lessons on staying financially fit in the new year. Adversity is often an effective teacher, and it’s safe to say that 2020 has taught us all something. As we move into 2021, and a brighter financial outlook, these are the lessons that I hope we all take with us.
- Rainy days come…so save for them.
When the pandemic hit and job losses among food service, hospitality, entertainment and manufacturing sectors hit their high, those with a solid emergency fund in place had more choices. When times are good, pay yourself first. Sock away 5% a month into an interest-bearing savings account, or if you already have a solid emergency fund, consider a higher-yield Certificate of Deposit. Your cash will grow, and you’ll know that your safe no matter what world events affect your livelihood.
- Be smart with debt and credit.
Using credit is an important strategy for owning a home, growing your business, upgrading your farm equipment. But each of these investments pay dividends. A home grows in value, and is often the primary source of wealth most people have when entering retirement. Getting your business off the ground has the potential to create wealth for you as the owner, and provide solid jobs to everyone you employ. And keeping your farm operating is critical to your family and community. But keeping a high balance of rotating debt on credit cards and personal loans just bloats your fixed expenses every month, making it harder for you to weather a downturn. So use debt only where it makes strategic sense, where you’ll have fixed payments and reasonable rates, not to pay for short-lived pleasures that you can’t afford.
- Keep your head, and you’ll keep your wealth.
What if everyone had sold off their investments in March, when things first fell off the metaphorical cliff? Can you imagine the wealth that would have been lost if everyone had lost their heads? Fortunately, most people held their investments, and now, they’ve made back most (if not all) of their value and are heading into 2021 strong. The stock market moves up over time, though there are periods of bumps and dips that shake our confidence. Even when emotions are running high, selling when stocks drop is a bad idea. We held tight in 2020, and because of that, we’re positioned to growth as the economy continues to expand.
- Take advantage of market “sales”.
The great thing about a market dip is that stocks, mutual funds, and Exchange Trade Funds (ETFs) are all on sale, and accessible to more people. It’s a great time to buy! The same is true for borrowing money. When interest rates drop, you can refinance your home to get lower payments or a shorter loan term, putting you in a stronger position to weather the storm. Lower interest create opportunities to finance capital expenses for your business or farm at more attractive terms. Unstable markets create all sorts of smart financial opportunities if you’re willing to look for them.
- Money isn’t everything.
If 2020 taught us anything about money, it’s this: when we can’t see the ones we love, when someone we care about is sick, when the people dearest to us our afraid and we can’t make them feel better, money just doesn’t matter. This year, we’ve spent more time in our homes, with those closest to us…while being forced apart from other family members. We’ve comforted scared children and exhausted friends, sometimes via Zoom. And we’ve had to steer clear of the vulnerable folks in our lives, even when we’d give anything to see them. Treasure the relationships in your life. They are the reason we work, earn, save, and invest every day. They are what matter.
As we head into 2021, a year that I’m very optimistic about, I’ve learned once again that money is an amazing tool. It can improve lives and communities, create remarkable experiences, and allow us to give to causes that uplift those around us. So, friends, in 2021, make smart decisions about your financial fitness.
But also remember to spend your time where it matters most and treasure your health. Because money can buy you neither.
Happy near year from our family to yours,
Gerry Dunlap, CEO