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Financial Resolutions: Start 2021 Off on the Right Foot

By Deborah Jeanne Sergeant


Have you made a New Year’s resolution to start exercising, drink more water, stress less or lose that extra 20 pounds?

All of these can improve your health; however, it is also important to look for ways to improve your financial health in these turbulent times.

“The COVID-19 pandemic has hit people and companies with the lowest amount in cash and investments the hardest,” said Diana Apostolova, financial consultant and retirement planning specialist with Rochester Investments in Rochester.

That is why she believes that saving up a bigger reserve of cash or creating more easily accessed resources can be helpful for many people who are still working.

“People who didn’t have enough saved and lost their jobs had little to rely on,” she said. “The small businesses that had to comply with the lockdown saw their revenues disappear and sadly many of them went out of business. With that in mind the biggest lesson from 2020 is the value of savings.”

She wants more people to maximize their savings and to increase their investments.

“Being self-reliant has never proven more relevant than we’ve experienced this past year,” Apostolova added. “Having a piece of mind as it comes to money and health is so critical and I’ll encourage everyone to make it a priority.”

She also thinks that minimizing debt is a good idea.

Mortgage debt is not as troubling as revolving debt, since mortgage debs uses simple interest, often at low rates. A home mortgage is related to a marketable asset. Credit cards often charge very high interest and charge interest on interest.

Paying off credit card debt may seem daunting; however, many people assume that paying the minimum monthly payment will eventually take care of the debt. Actually, this causes the debt to snowball.

“Never pay just the minimum on debt,” said Jerry Christopher, an agent who has worked 36 years with State Farm Insurance in Webster. “Always pay more than what is owed.

Consolidating credit card debt onto one interest-free offer can make a big difference since much of the monthly payment is comprised of interest. Divide the sum owed by the number of months in the interest-free account offer. For example, debt of $15,000 for an 18-month interest free offer would mean payments of $833.33 per month. If you could not afford this, continue to pay down the debt until it is manageable. $13,500 in debt would mean payments of a minimum of $750 per month for 18 months. While making the no-interest payments, do not charge anything.

Christopher also advises buying whole life insurance instead of term life insurance if possible; however, for those with short-term debt, term life insurance may be better until it’s paid off.

“Whole life insurance will always be there for you,” he said. “With term, you can cancel that policy after the debt is gone. There’s also credit life insurance if you have a car loan. “

That can protect survivors from losing the vehicle.

Some mid-life and older people who have certain health issues assume that they can no longer buy life insurance. Christopher said that’s not always the case.

“There are companies that offer it to people who have cancer and ‘uninsurable’ issues,” he said. “They’re extremely expensive, but if you live past that certain period of time, that life insurance will pay out when you pass away. Never say, ‘I can’t get life insurance’ because you should be able to get it.”

This year resolve to keep better records of your finances. Whether in paper or digital files, orderly financial record can help you at tax time and when financial planning.