American Consumer Credit Counseling sets clients up for financial prosperity in the new year
Boston, MA – December 21, 2021
As 2021 comes to an end, many Americans will start planning their financial goals for the new year. National nonprofit American Consumer Credit Counseling (ACCC) is advising clients on setting realistic financial goals as we head into 2022.
The COVID-19 pandemic affected all aspects of people’s lives – including their financial health. According to ACCC’s Financial Health Index, in March of 2020, 80 percent of respondents said their financial health was impacted by the pandemic. Although the Bureau of Labor Statistics reports that since peaking during the pandemic, the unemployment rate has been steadily falling, we are still feeling the impact of the ongoing pandemic, and Americans must be prepared.
“The pandemic showed us all how important financial stability is in case of an emergency,” said Allen Amadin, President and CEO of American Consumer Credit Counseling. “Planning at the beginning of the year and setting financial goals is a great way to be organized, prepared, and achieve goals.”
ACCC shares with several key strategies to achieve financial success in 2022:
- Saving during the new year: Finance experts recommend saving 20 percent of one’s income per month. As we have learned during the pandemic, saving three to six months’ worth of living expenses in an emergency fund is crucial to create financial security in case of a sudden job loss or unexpected medical bill. However, saving is also important to make big purchases such as a house or car. Saving for retirement through a 401(k) which can grow over time is also vital for your future financial health.
- Pay down debt: ACCC advises clients to stick to their budgets during the holidays. Since this cannot always be achieved, after the holidays consumers should:
- Cut back on spending. Consumers should only spend on what is necessary and avoid impulse purchases such as takeout, shopping or entertainment.
- Stop credit card usage temporarily, so that no more debt is accumulated and the holiday debt can be completely paid off.
- Using tax returns or bonuses is also an easy way to pay off holiday debt.
- Set SMART goals: Knowing how to achieve goals is key. The SMART acronym stands for specific, measurable, attainable, realistic, and timely. One example of this can be paying off debt. Measure how much can be paid off per month and determine if it is attainable and realistic during a specified period of time.
The past two years have been a bumpy ride for Americans, and the new year will not be any different. With the supply chain disruptions brought by COVID-19, and inflationary pressures it is now more important than ever to have a good grasp of personal finances and be prepared for what may come.