Plenty of us will be happy to see 2020 in our rear-view window come Jan. 1.
The eventful and disruptive year presented all sorts of challenges, from our health to our education to our politics. Many families were also hit financially, whether jobs ended or changed, or adult or college-age children needed to move back home.
The year included some positives, however: many families used these unusual circumstances as opportunities to learn better budgeting and spending habits to improve their overall financial security and increase their optimism about their finances in general.
A recent survey from COUNTRY Financial indicated that about 3 in 4 Americans want to learn ways to improve their financial situations and develop better financial skills. This can include ways to cut back on unnecessary spending (48%); reduce debt and making timely payments (30%) and put more money into savings (27%).
Luckily, there are opportunities to turn these good intentions into practical strategies to improve financial literacy, along with simple steps to get started on the road to stability.
David Walker, financial representative with COUNTRY Financial in Spokane, has seen people coming in all year interested in how to reduce debt, save more, and budget better. This can also include finding out about retirement options and new ways to make sure their family stays protected.
Walker has also seen more people who have gained a better knowledge of basic budgeting because of all the challenges they’ve had to face in just the last few months.
“I’m happy that some good has come out of this situation, but sad that this learning was invoked by a pandemic and job losses,” he said. “When people are close to losing everything, they tend to get laser-focused on what’s most important, like food or shelter, which forces budgeting, cutting out unnecessary spending, or paying down or paying off debt.”
Survey shows interest in education
The online survey, called the COUNTRY Financial Security Index, asked about 1,015 adult Americans in different income brackets a variety of questions in November. COUNTRY Financial has collected information for the index annually since 2007.
It also indicated that:
• The disruptive year has led to people wanting or needing to revise their personal financial goals, which can include holding off on buying a home (9%); not buying a car (9%); not putting money aside for college (5%); or even putting money into emergency fund (10%).
• At the same time, 2 out of 3 Americans, or 61%. say they don’t regret any financial decisions they did make in 2020, which can include unnecessary purchases (20%) or not putting enough aside for emergencies (17%).
• Next year could be better: 2 in 5 Americans are optimistic about their financial outlook in 2021 (38%) and a similar number expect their financial situation to at least stay the same (36%).
Whatever someone’s level of financial security or financial literacy, Walker and his team enjoy helping them set and meet their goals.
“We’re champions of coaching people through a personal budget, which can include advocating and encouraging them to get out of debt, save an emergency fund of three to six months, and saving for future goals like retirement,” he said. “A goal without a plan is just a dream: a goal keeps you accountable to yourself.”
The COUNTRY Financial Index also showed that financial security varied by age, location and education.
Baby Boomers are the most likely to feel financially secure (65%), and next was Gen X at 54%. Only 44% of millennials are likely to feel financially secure, while 50% of Gen Z is.
Part of the reason is because older generations have been around longer and are closer to retirement so are more familiar with the need to save.
Walker said millennials can also easily learn skills to improve their security, starting with the knowledge of setting a budget.
“Millennials have less real-world experience than the Baby Boomers and may be more susceptible to outside influences and things they see on social media,” he said. “There are numerous tools– including books, podcasts and smartphone apps – that offer strong budgeting advice and show the real-world successes of others, who most often started in a worse situation than you think you might be in now.”
He said any format can provide valuable lessons in digging out of a financial mess and building confidence.
“Once someone decides to pay down debt or save, they end up doing it much quicker than they originally planned. It’s like playing a game against your own plan, and you want to win.”
Whatever your level of financial literacy, you can always learn more, which will lead to better financial habits overall. He suggests starting by paying smaller debts first, then adding what you previously were paying toward your larger debt, which will make everything go faster.
“The momentum you build will cause you to complete your goal, and the momentum changes your behavior,” he said. “Personal finance is not a math problem, it’s a behavior problem.”
Connect with a local COUNTRY Financial Specialist for a free financial review. Read the latest COUNTRY Financial Security Index here, and visit COUNTRY Financial on Twitter at @hellocountry, on Facebook at Facebook.com/countryfinancial or on Instagram at @countryfinancial to learn more.
About COUNTRY Financial
The COUNTRY Financial Group serves about one million households and businesses throughout the United States. It offers a wide range of financial products and services from
auto, home, business and life insurance to retirement planning services, investment management and annuities. Learn more at countryfinancial.com.
The COUNTRY Financial Group serves about one million households and businesses throughout the United States. It offers a wide range of financial products and services from auto, home, business and life insurance to retirement planning services, investment management and annuities. Learn more at countryfinancial.com.
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