It’s been a long, strange, tiring year, and many of us are eager to leave 2020 in our rearview mirror.
After all, there’s a lot to look forward to in 2021: the vaccine rollout, maybe even more stimulus checks, and potentially tens of thousands of dollars in student debt forgiveness.
But despite these glimmers of hope, slapping a new calendar up on the wall isn’t going to make all of your financial headaches disappear. The pandemic will likely have widespread repercussions for months — possibly years — to come.
Here are eight money moves you can make today to prepare for the new year ahead.
1. Keep building your emergency fund
If the lockdowns and layoffs taught us anything, it’s that having a solid emergency fund stashed away is one of the wisest financial decisions you can make.
Most financial experts recommend keeping enough emergency savings on hand to cover at least six months’ worth of your regular expenses, including your rent, your groceries and any other recurring monthly bills.
Even if your emergency fund survived 2020, you should try to keep it topped up — especially if you’ve got the money parked in a high-interest savings account.
With a high-yield account, your money will earn far more interest than it would in a traditional checking or savings account at one of the big banks.
2. Check in on your credit score
You might not think your credit score matters that much, but if you ever need to take out a loan to cover an unexpected expense, a bad score could leave you without many options.
If you haven’t checked in on your credit score in a while (or ever), don’t worry — there are several online services available that will show you your score for free in just seconds.
A solid credit score won’t just help you get an emergency loan; it will also unlock the best interest rates on a variety of financial products, including mortgages and credit cards, potentially saving you thousands.
Many websites offering free credit scores also provide free credit monitoring services. They’ll notify you anytime there’s a change in your score and send you personalized tips on how to bump it up if it’s lower than you’d like.
3. Clear out your high-interest debts
If you’ve been leaning on your credit cards a bit more than usual this year, you’ve likely racked up a pile of interest.
Credit card interest rates can be ridiculously high (over 20% in some cases), and they hit even harder because they compound. That means if you don’t pay off the full balance each month, you’ll end up paying interest on your interest.
For a fresh start in 2021, you may want to consider clearing out your credit card debt with a debt consolidation loan.
So long as your credit score is decent, consolidation will let you trade in all of your existing debts for a single loan at a much lower interest rate. You could save thousands of dollars in interest and become debt-free years sooner.
4. Give your budget a tune-up
You may have already adjusted your budget during the pandemic — maybe more than once — but as the year draws to a close it’s worth taking another look at your bills to make sure you’re not spending more than you need to.
You might be able to cut down your grocery bills by trying out a few different stores in your neighborhood. Prices can vary a lot between chains, and you could find that your usual go-to is not the best option.
The same logic can be applied to your other monthly expenses as well, like your car insurance. Check out how much you’re currently spending and then compare rates from at least three other insurance companies to make sure you’re getting a good deal.
By comparing rates for free online, you may be able to save up to $1,100 a year.
5. Get your retirement plan back on track
As anyone with a 401(k) can tell you, 2020 was a bumpy year for retirement savings.
If the pandemic threw a wrench into your plans, you may want to sit down with a certified financial planner (CFP) to help.
A CFP can build you a personalized retirement plan based on your current situation and long-term goals and can provide valuable insight on how to make the most of your money in 2021.
Working with a financial planner is surprisingly affordable, and these days it can be done entirely online, after a free initial consultation by phone.
6. Refinance your mortgage
Mortgage rates kept crashing through the floor in 2020, so if you’re a homeowner and haven’t refinanced already, you’ll want to do that first thing in 2021.
Refinancing your mortgage now could save you hundreds of dollars a month — and tens of thousands over the course of your loan. Good candidates should have a solid credit score and at least 20% home equity.
It’s important to shop around first before you commit to an offer. A study by the government-sponsored mortgage agency Freddie Mac found that comparing rates from at least five lenders can make a $3,000 difference in how much you save over time.
7. Price-check when you shop online
This year saw more Americans than ever do their everyday shopping online. With lockdown measures dragging on into 2021, you can expect online shopping to remain the preferred method for the foreseeable future.
Amazon and Walmart.com make it easy to get everything you need all in one place, but unless you price-check every item in your cart across multiple online stores, you might spend more than you should when you click the checkout button.
Fortunately, a free browser extension is available that can instantly compare prices on everything in your cart against thousands of other online stores.
It takes just a few seconds to download and install, and could potentially reduce your online shopping bills by hundreds of dollars in the new year.
8. Supplement your income with a side gig
If your regular income was disrupted by the pandemic, or you’d just like to give your bank balance a boost in 2021, it’s never been easier to turn your hobbies into cold cash.
An online freelance marketplace can help ordinary people find buyers for all kinds of talents, from web design to blogging to personalized portraits.
Best of all, many of these side gigs can be done from the comfort of your own home.
Spending a few hours a week on side gigs will also help to expand your network and build up your resume, both of which can be important factors if you decide to look for a new job in the future.