Your 2021 Financial Guide

An ebook I wrote and edited entitled "Your 2021 Financial Guide"

2020 brought with it many unique challenges we’ve never faced before. The economic strain of the global pandemic has had far-reaching effects, with many people facing employment uncertainty and a large reduction in income.

While some measures have helped alleviate this burden, many people are still struggling, and are forced to rely on credit cards or loans. However, this reliance only creates further financial issues, meaning you could carry debt accumulated in 2020 far into 2021. If you’re already carrying credit card debt, these financial issues can be particularly difficult to deal with as you’ll have to contend with both a lowered credit score and the often sky high interest rates that come with many credit card terms. As one of our graduated clients, Lana, shared, "I fell victim to credit card debt, and it was really overwhelming."

Here at National Debt Relief, we know that debt can be a tremendous burden. We want you to know that we're here to help. This year, we’re committed to helping you find a financial solution that works for you and helps you start getting out of debt and onto sturdier financial footing.

Getting out of debt may seem impossible, but we're here to tell you it's not! In this guide, we'll walk you through everything you need to know to start 2021 off with your best financial foot forward.

First, we’ll show you how to assess your current financial situation and figure out what's working and what's not. From there, we'll explain how to start setting up realistic and achievable savings goals. With the help of our free budgeting worksheet, we’ll demonstrate just how easy it is to set up and stick to a budget. Finally, we'll give you actionable items that will allow you to get started today on getting out of debt.

Getting out of debt is hard; together, we can make 2021 the year you prioritize your finances and find the road to financial independence.

1. Let's Take a Look at 2020

2020 has seen both a health and economic crisis that has disrupted every aspect of our daily lives. Plans have been cancelled, most meetings are virtual, and you have to mask up before even thinking about leaving the house. For those still working outside the home, the income stability has drastically wavered as local and federal guidelines continue to change rapidly.

While it seems we’re making some progress in tackling the health crisis, many Americans have found themselves ill-equipped to deal with the economic crisis and its far reaching impact. Here's a quick snapshot of the damage caused already:

• Unemployment peaked at an unprecedented level from April-May of 2020, with more than 20 million estimated to be unemployed.

• As of September 2020, 1 in 6 renters were behind on their rent and around 34 million people were facing eviction.

• From 2018 to mid-2020, the rate of food insecurity doubled for households with children.

• In a survey from the end of last year, 42% of respondents said their financial situation had worsened since the onset of the pandemic.

While these statistics paint a pretty bleak picture on their own, they fail to capture the personal economic stress put on individuals. Whether it's having to take a second job to cover the bills, asking for financial help from family and friends, or taking on extra debt to keep afloat, millions of Americans have had to leave their financial comfort zones just to get by.

Many Americans entered this year with a set of ambitious financial goals, such as saving for a home or getting out of credit card debt. However, the economic reality is that for most people, it was almost impossible to even come close to reaching those goals. All across the country, Americans' savings accounts and emergency funds are running out and their debts are growing.

Faced with a reduced income, many people have been forced to pay for basic living expenses on high-interest credit cards with balances that grow all too quickly. This has caused some Americans to contend with the possibility of an eviction or foreclosure crisis. Every day, people are falling deeper into debt with less and less hope of paying it off.

At National Debt Relief, we want to make sure that these setbacks are just temporary. This financial guide will show you how to wipe your slate clean so you can approach the new year with a plan and reach all your financial goals, even if you’re in debt.

2. How Are You Handling Your Debt?

Over the course of this year, debt has quickly become commonplace for Americans. With so many businesses forced to close, most Americans felt the effects either through a reduced work schedule or the loss of a job entirely. These changes in income have been especially tough on the millions of people living paycheck to paycheck who have little or no savings for an emergency.

"According to the New York Federal Reserve, household debt balances through March 2020 totaled $14.3 trillion, a 1.1% increase from the previous quarter and now $1.6 trillion higher than the previous high of $12.7 trillion in the third quarter of the 2008 financial crisis."

If you’re already living with debt, this struggle to make ends meet can only worsen your financial situation. It can start slowly, you’ll fall behind one month, then two months in a row. These amounts start small but with most credit card interest rates higher than 18%, these small balances will quickly balloon over the months they aren’t paid. This ensures that the overall balance increases and that you’ll soon be stuck in debt indefinitely. Couple these facts with the economic impact of COVID-19 across sectors and we're left with a nation of underemployed individuals carrying heavy debt loads.

Like the millions of other Americans in debt, you’re probably overstressed and doubtful that you’ll ever seen the end of your financial troubles. However, by using the financial guidance in this ebook, you're taking the first and hardest steps towards financial independence– asking for help and making a plan.

Build Your Debt Reset Plan

To help guide you to the debt solution that best fits your needs, the experts at National Debt Relief have put together an easy assessment to help you choose the right debt relief solution.

(Flow Chart) Start Here

Do you have $10,000 or more in debt?

YES:

• Is your debt secured by collateral? (ex. mortgage, auto loan)

-YES, Consider a home equity loan or bankruptcy.

-NO, Look into a debt consolidation program such as the National Debt Relief program.

• Is your debt unsecured? (ex. credit cards, personal loans, medical bills)

-YES, Consider a debt consolidation program such as the National Debt Relief program.

-NO, Explore a home equity loan, personal loan, credit counseling, or bankruptcy.

• Is more than 50% of your debt federal student loans?

-YES, Review your student loan refinancing options.

-NO, Consider a debt consolidation program such as the National Debt Relief program.

NO:

• Are you employed with a credit score above 580?

-YES, Look into the rates you can get with a debt consolidation loan.

-NO, Consider credit counseling and coming up with a debt management plan that fits your financial situation.

3. Create Savings Goals for 2021

One of the best ways to improve your financial health is to set realistic goals that can help you work towards achieving financial success and getting out of debt. To be successful with your savings goals, you’ll first need to consider the different types of savings funds and which will fit your goals the best.

Retirement Funds

Starting a retirement fund such as a Roth IRA or 401(k) helps set you up for a successful future. A Roth IRA is funded by after tax dollars while a 401(k) is funded by pre-tax dollars, meaning you’ll be taxed on it once you make withdrawals. Long-term options like these let you take advantage of interest and long contribution periods.

In addition, many employers will match the donations you make to a retirement fund, giving you more bang for your buck. If your employer doesn’t offer a match or you’re self-employed, you can look into individual retirement accounts. Before deciding which type of account is right for you, it’s important to consider both your current income and your income potential as changing tax brackets could make one option less desirable.

Saving for retirement may look intimidating, but it’s the type of savings account that benefits from even the smallest of contributions, so it’s easy to start doing even if you’re currently in debt. Start saving today and give yourself more freedom in the later years of your life.

Sinking Funds

A sinking fund is a separate savings account with a specific end goal for the money. They're useful for those who have difficulty saving for big expenses and don't want to use a credit card. People use sinking funds for things like family vacations, holiday presents, or even paying off credit card debt. A key part of sinking funds is creating a separate savings account that you won't access day to day. No matter the reason, it's satisfying to watch the funds grow, meet your goal, and then use the money!

Emergency Funds

As this past year has proven, an emergency can pop up when you least expect it and last for much longer than anticipated, making an emergency fund a vital part of any financial plan. With an emergency fund, you set aside money to specifically help with the unexpected costs associated with circumstances like losing a job or a sudden hospital trip. Make sure to set aside this money in a separate savings account to avoid the temptation of dipping into the funds for non-emergencies. Generally, it's recommended to save around six months worth of your total monthly expenses, but feel free to start with whatever you can.

Traditional Savings Account

This is the least complicated to set up, but also the easiest to take from. With this type of savings fund, you simply set up a goal of how much you want to save each month and then do your best to meet it. However, when you’re saving without a specific goal in mind, it can be easy to justify not meeting your savings goal or even taking money from the account on a regular basis.

By setting up auto-transfers with any of these types of accounts, you can start building your savings without having to think about it. It may take a while to reach your goals, but with hard work and dedication, you'll be well on your way to achieving your financial goals and making debt a thing of the past.

4. Budgeting 101

Once you’ve decided on your goals, the best way to actively start achieving them is by setting up a budget that takes them into account. Starting a budget may seem tough, but by following the easy steps laid out below, you'll have one before you know it. Remember, budgeting doesn't have to mean you stop spending on fun activities or things you need. Instead, it means being purposeful with the money you do spend so you can afford what you need while continuing to work towards financial success.

Not only will a budget help you meet your goals, but it will also help reduce your chances of fraud by getting you to monitor your spending accounts more actively, thus making you more aware of unauthorized purchases or withdrawals. If you're ready to start creating good financial habits and move away from debt, it's time to make a budget.

1. Track Your Income

The first step in building a budget is to track your take-home pay or unemployment benefits and any side hustles you may have. Getting a clear idea of your total income makes it easier to understand your current financial situation and where you need to make changes.

2. Assess Your Current Spending Habits

Next, go through credit card statements and receipts to see where money is being spent. Take the time to itemize those statements by category. Everyone will utilize different categories, and as your income fluctuates, these categories probably will too. With varying but repeated charges, such as utilities, it's okay to estimate or average the monthly amount.

Once the transactions are categorized, go through and identify any unnecessary spending. For this step, it's important to figure out exactly what classifies as a need versus a want. For example, one way to cut down your meal costs is to start meal prepping. By meal prepping, you can take advantage of both buying in bulk and avoid the temptation of getting takeout, because you’ll already have meals ready to go. It’s a win-win! Now, you may be worried that being on a budget means you can never splurge, but that’s not the case. Instead, you’ll become more mindful of when you do splurge making it seem like even more of a treat.

3. Create a Goal Spending Number for Each Category

Once you figured out your categories, it’s time to determine the fixed categories such as rent or insurance versus fluctuating categories like groceries or utilities. Then, you’ll estimate how much needs to be spent on each category based upon your total income and past spending habits. The total of these categories will become your budget for the next month. It may take a few months to get this right, so don't be afraid to make adjustments as needed. You'll probably make mistakes, but don't get hung up on them. Creating new financial habits is hard, and it will take time for them to stick.

4. Don’t Forget to Pay Yourself First

Another important part of a budget, and the way to maintain those savings goals, is to pay yourself first. This means, before any money is spent, make "future you" the priority and set aside money for savings, whether it be a retirement fund or even just a traditional savings account. By including savings as part of a monthly budget, you'll avoid worrying about having enough to save all month, and instead know exactly how much you have to spend from the start.

5. Monitoring Your Budget

The last, and most important step is deciding how you’ll monitor your budget. One of the simpler methods is to use envelopes. Each month you’ll withdraw the entirety of your budget (minus whatever you pay yourself first) in cash. You’ll then label a series of envelopes with all of your budgeting categories and put in the corresponding budget amount. Once the cash runs out, you’re done spending in that category for the month. Another option is to use a notebook and simply write out everything you spend. Either way, it’s important to continually monitor your online accounts to make sure there are no bogus purchases or withdrawals.

If you’d prefer the digital method to monitor your spending, you can try an app like Mint or YNAB which will upload and sort your transactions for you. If you’d like to keep your budget off your phone, an excel sheet is always an excellent way to track your spending and stay updated on your purchases. As with the nondigital monitoring methods, it’s important to continue to monitor your online accounts for any fraudulent purchases.

By using these steps, you should be able to put together (and use) a successful budget in no time. If you need more help, download our free budgeting spreadsheet, which offers even more guidance and customization while you build your budget.

5. Help Your Dollar Go Further in 2021

Once you have a budget and have established your savings goals, it's time to help your dollar go further. You can accomplish this by identifying new ways to cut costs and increase income. This doesn't mean that you suddenly need to stop your streaming service or pick up a dozen side hustles. Instead, it means making a conscious effort to stick to your budget and find wiggle room wherever you can.

Step 1: Cutting Costs

When cutting expenses, don't go too crazy. While saving is important, you want to make sure you're still able to enjoy your life. Once you have a good picture of your money coming in and going out, start analyzing what's going out and see where you can make some changes.

Eliminate extra subscriptions

Do you subscribe to three different streaming platforms? Try cutting down to one or two. Do you have an audiobook subscription? Try looking into your local library and getting a library card. Most libraries have very extensive online catalogs where you can borrow audiobooks as well as print books. The key here is examining the subscription service costs and seeing where you can find free alternatives or do without.

Negotiate your bills

Did you know that you can negotiate with companies to lower your bills? Many companies are willing to work with their clients on cost, especially given the current economic situation. The first step to negotiating your bills is seeing what else is out there. Find out what other companies charge for a similar cell or cable plan and use that information to negotiate.

Another option is to offer to pay in cash. Some companies may offer a cash discount for their services. You should also try and leverage your customer history. If you've been a long-time customer and have a good payment history, you can use that to negotiate a lower rate.

Make the Swap

One of the biggest expenses can be single use items such as paper plates, paper towels, or even fast fashion garments. These items tend to have very short lifetimes, so they’re something you’ll have to rebuy again and again. While it may be more time consuming (and require more of an initial investment) to swap to higher quality and longer lasting items, it will save you much more in the long run. Furthermore, many of these items can still be bought secondhand. Need a new set of dishware? Sites like ebay or even thrift stores will have tons of gently used sets. Looking for a new winter coat? Instead of buying something new and cheap, take the time to hunt for a gently used but higher quality item, meaning the cost won’t be too different from something new, but it will last much, much longer.

Step 2: Find Extra Income

The second part of making your budget stretch is finding extra income within your budget. This differs from merely cutting an expense because instead of spending less money, you're finding ways to add income so you can spend more while still staying on budget. The following tips can help you to do just that.

Find a side hustle

Finding a side hustle doesn't mean you suddenly have to spend all your free time at a second job. It means finding a job or skill that is convenient for you and brings in some extra income.

If you'd like to stay at home, you can look into transcription or virtual tutoring. Both of these types of jobs have flexible hours and won't require leaving your house.

If you're willing to look a little further, you could consider working as a personal shopper or a delivery driver. Both of these require access to a car but can also lead to a higher part-time income. The key to a successful side hustle is finding something that works for you and your situation, instead of feeling as if you have to stretch yourself to fit the job.

De-clutter your home for cash

Do you have an old TV lying around or some old baby clothes from when your kids were younger? Try using apps like OfferUp to sell your old items. Beyond those apps are marketplaces such as eBay or Craigslist, both of which accomplish close to the same thing. By selling just one or two items each week, you can easily boost your income by $50-$100 each month.

Start racking up rewards

Make your spending work for you! By utilizing a rewards app, you can get money or gift cards just by spending on your budget. Ibotta will give you rewards on groceries, something even the strictest of budgets allows. With Acorns, you can start investing with just pennies and quickly watch that money grow. With a rewards-heavy credit card, you can start getting further money back for groceries or dining out.

Sticking to a budget can be hard, but by making your dollar go farther, you’ll find you can both follow a budget and put extra money away. Whether your goal is to build your savings or to start paying off debt, these tips will help.

6. Tackle Debt in the New Year

Throughout this ebook, we've guided you through making a financial plan for 2021. First, you learned about assessing your current financial situation so you can see what's working and what isn't. From there, we showed you how to set realistic goals in your budget so you can prioritize getting out of debt and building your savings. Finally, we provided you with a clear set of actionable steps you can take to start changing your financial situation today.

If you start enacting these changes now, you should start seeing your savings build quickly and your debt reduce. While the initial amounts may seem small, with dedication, they’ll soon add up. However, for some people, the steps laid out in this guide may not be enough. That's where the National Debt Relief program can help. Our proven system has helped thousands of people just like you who are struggling with overwhelming debt.

When you enroll in our program, you're no longer fighting debt on your own. Instead, you'll have the support of a team of Certified Debt Specialists behind you who will help you pay off your debt for less than what you owe. We also have a dedicated client portal to make sure you stay updated and know just how much progress you're making every day.

As one recent graduate shared, "My experience was so great and really easy. I loved that they handled everything for me, and I even had a client portal where I could see my payments and payment schedule."

On average, our clients graduate from our program in just 24-48 months and save 30-50% on their debt. Imagine, in just a couple of years, you could be out of debt.

Stop waiting to change your financial future and decide to make a difference today. Whether you use the steps in this ebook or are ready to enroll in the National Debt Relief program, we're here to help you on your financial journey. Make the decision to get out of debt and give us a call!

Wrap up

By following this guide, you’ll soon be on your way to starting 2021 off on great financial footing. By creating a budget and actionable savings goals, you'll be ready to face whatever financial challenges come at you in the new year.

However, if you're committed to getting out of debt, we're here to help. The National Debt Relief program has helped millions of Americans gain better financial footing so that not only can they pay off their debt, but they have the tools to stay out of debt as well.

Our customizable programs are tailored to you and take into account your specific financial situation. In addition, our website is full of even more great tips, all of which will help you learn good financial habits and say goodbye to debt. Even with the financial strains of 2020, many of our clients were still able to graduate. As recent graduate Lana recalls, "I had so much less anxiety because NDR made it realistic for you to actually achieve your goals."

Financial independence is closer than you think, so give us a call and put financial wellness and getting out of debt at the top of your 2021 to-do list.

** Please note this is just the text, final ebook was stylized with a graphic designer