CLEVELAND — 2020 was a rough year financially for a lot of people amid the COVID-19 pandemic. We learned a lot of hard lessons, and typically a better bank account is high up on our new year resolution list.
In today's "2021 Refresh," we talked to financial expert Larese Purnell, who gives three steps you can do right now to help boost wealth.
Constantly being "in the red" is a main source of stress for families, so you'd think we would know where every penny goes. Purnell, however, says that's not the case.
“People don't even know where their money is going, and I say it's like being in a rowboat with a slow leak. It takes a long time for it to sink, but eventually if you don't pay attention you'll sit there and you'll sink in your finances.”
So, first step, gather up all of your bills and figure out where your money is going, both "needs" and "wants." That's where you'll know where you can save.
“People who were unemployed during this season realized it took us two to four months if you were laid off to get unemployment, so that should have showed you. That's the biggest gauge, was how long can you survive without a job?”
Stashing away three to six months of salary isn’t easy, but Purnell says that’s why really organizing your budget is key. That’s where you’ll find the luxury items you can cut back on.
Step two is to make sure you're not alone in the savings plan.
“I would say people have to literally set goals and create accountability partners, be it your spouse [or] be it your entire household,” says Purnell, “because a lot of time we don't realize that people in your household will keep you from accomplishing those.”
Step three is to make your budget something you go over every week.
“I just ask you on Saturdays to date your money. Give yourself one to two hours every Saturday to just sit down and go through your finances so that you can really make sure at the end of the year that you're better off than the beginning of the year where you started.”