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Ending the Year with Financial Stability

Core Facts

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Thursday, November 19, 2020

2020 is coming to a close, and some might be excited to see this year in the rearview mirror.

But for others, this past year may have been an unexpectedly successful 12 months. Either way now is the time to look forward and plan for the coming year. It's also a good time to look back and take stock of your current state of financial health.

Budget

Committing to keeping a budget is the best start you can make to a new year. Shockingly, as many as 56 percent of Americans find themselves running out of money at the end of their pay period, and up to 78 percent of Americans are living paycheck to paycheck.

Given these statistics, it isn't surprising that only 41 percent of American households follow a budget. That’s a pretty revealing statistic when a full two-thirds of Americans would be hard-pressed to come up with $1,000 in an emergency. Having a budget and knowing where you stand financially means you can plan to improve your situation.

Saving

Fifty percent of Americans have less than one month’s income saved for a rainy day. Finding a trustworthy personal financial advisor who can help you decide what the best steps are for investing or planning for retirement, or even a deposit on a home, is an excellent plan. However, if you are not quite ready to jump into the investment market, then simply putting a sum of money aside as often as possible will very quickly pay off.

Financial Literacy

Making sure you understand your money, where it is, and what it is doing is extremely important. Therefore, being financially literate is a huge step in the right direction. It turns out, many Americans aren’t financially literate. And they’re stressed about it.

In fact, a FINRA study found financial capability, stability, and confidence aren’t improving. Over fifty percent of adults say thinking about their financial situation makes them anxious. Forty-four percent say discussing their finances is stressful.

Younger Americans are feeling the greatest burden. The study found persisting and widening gaps between those who are struggling and those who are prospering financially — skewing generationally. Those between the ages of 18 to 34 have the highest levels of financial stress (63 percent) and anxiety (55 percent). 

Taking control of your financial affairs and understanding them completely is the best way to move forward into the New Year. Setting a budget and making sure all your bases are covered means that this next year should be far better than the previous one.

 

IMPORTANT DISCLOSURES

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. 

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable-- we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC

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Founded in 1976, David Lerner Associates is a privately-held broker/dealer with headquarters in Syosset, New York and branch offices in Westport, CT; Boca Raton, FL; Lawrenceville, NJ; and White Plains, NY. For more information contact David Lerner Associates Call 800-367-3000 Visit our website: www.davidlerner.com

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