As the U.S. economy begins to recover and Washington state reopens, now is the time to revisit your finances and regain your financial footing. Whether you were able to save during the pandemic or struggled to make ends meet, COVID-19 has undoubtedly changed the way Americans earned, spent and saved their money.

We asked Stacey Black, lead financial educator at BECU, for some timely tips on keeping your finances in check as life slowly returns to a new normal. Here’s what she had to say.

Tip #1: Emergency funds are a must

If the pandemic has taught us anything, it’s how crucial it is to have an emergency savings fund. “Although the amount you should save remains the same, the seriousness of keeping an emergency fund definitely has changed,” Black says. “This fund should contain between three to 12 months’ worth of living expenses.”

That’s a very wide range so, for example, if you have a very stable job and limited expenses, Black recommends saving closer to three months’ worth. However, if you’re retired or the sole provider of your household, then you may want to keep the fund at the higher end, or 12 months’ worth of expenses. “Saving is no small feat, so don’t get discouraged if you don’t ‘figure it out’ right away. The most important thing is to save something,” Black says.

One way to quickly access money for an emergency fund is to take a hard look at the expenses you may have reduced or eliminated during the pandemic and rather than reinstate them, set them aside instead. “For example, if you learned to give yourself a manicure or a haircut, would you rather start paying someone else again or keep doing it yourself to save money? Or, instead of renewing that old gym membership, continue your at-home workouts and put that money you would have spent into your emergency savings.”

This year of uncertainty has shown us how important it is to save for the unexpected and save as much as possible for better peace of mind. Establishing an emergency savings should be a part of any financial plan, both now and in the future.

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Tip #2: Create a post-COVID budget

At the beginning of the pandemic, Black says she suggested people pause their financial goals, especially if they were worried about not having enough money to pay their bills. But now is the time to take a step back, reevaluate your budget and put your goals back to work. You might even add new short- and long-term goals.

To help move yourself in the right direction and start planning financially for the future, it’s important to ask yourself the following questions:

  • What expenses do you expect to have in the next three to six months?
  • What changes are coming up that may impact your budget? For example, if you’re returning to an office environment you may need to consider adding transportation, child care and dry-cleaning costs back into your list of expected expenses.
  • What federal student loans or other debts were placed on deferment during the pandemic? When do you start repaying them?
  • What plans from the past 18 months have you placed on hold? For example, do you need to start saving again for travel or celebrations for a wedding, graduation or retirement? “I’m personally saving for a vacation. I think we all need one and deserve it after the challenging year we’ve had,” Black says.

Also, don’t forget to budget for your health. Black experienced the shock of not having money set aside for health issues and wound up paying $4,000 out of pocket for medical expenses. She admits she wasn’t prepared and now has a savings account dedicated to health expenses. In fact, she has several savings accounts, all for different things. “Most financial institutions allow you to have more than one account and assign names like ‘vacation’ or ‘home down payment,’ ” Black says.

Tip #3: Pay down debt

If you paused paying down debt during the coronavirus, now’s the time to add this back into your budget. “Getting debt under control should be one of the first things you focus on as life returns to normal,” Black says.

“People often ask me: should I pay off my biggest or smallest debt first? Or perhaps those that carry the highest annual percentage rates? My advice is to list out all of your debts in one spot, including the total amount owed, the interest rate and the minimum payments. Then, look into and compare different debt payoff strategies and choose the method that will motivate you the most,” Black says.

You might also consider refinancing your home in order to take advantage of the very low interest rates right now and use that money to tackle your debt. However, keep in mind that it costs money to refinance. “Figure out what the associated costs and fees will be and if you’re planning to stay in your home long enough to recover those costs with your reduced payment.”

Stacey Black

Tip #4: Increase retirement savings

Coming out of the pandemic provides a good opportunity to revisit your retirement savings. Black suggests consulting with a financial adviser to help you figure out the best course of action, whether that’s increasing your contributions, assessing how much you need in cash flow in retirement or outlining the necessary steps to achieve your goal.

“Also, if you have a company-sponsored retirement account, why not increase your contributions? If you’re able, consider bumping up your retirement contributions a percentage point or two each year until you’re saving 15% of your pretax income for retirement,” Black says. While not every employer offers a match on contributions, if yours does, then not contributing enough to maximize your 401(k) is essentially leaving money on the table. “Besides, your future self will thank you,” Black says.

Tip #5: Consider investing

If the pandemic didn’t hurt you financially and your emergency savings is up and running, you may consider investing as a next step. “Both fear and interest now surround investments,” Black says. She suggests speaking with a professional who specializes in investments to take some of the emotions out of it. They can remain neutral because it’s not their money.

As a member-owned credit union with more than 1.28 million members and $26.8 billion in assets, BECU is focused on helping increase the financial health of its members and communities through better rates, fewer fees, community partnerships and financial education. BECU is federally insured by NCUA.