Expert financial advice for the new year
“Nothing has to be assumed, nothing will happen automatically. And even if laws are passed, it is still the individual’s responsibility to ensure that they benefit, ”says Farnoosh Torabi, personal finance author and host of the “So Money” podcast.
One thing Torabi says you should do not do now? Prioritize your debts over your savings.
While it may seem unusual, 2020 has changed a lot of things, one of which is traditional financial advice. To maintain your financial health right now, you may need to do things a little differently. Saving should be your top priority, especially if you have lost your job or have no money. emergency reserve, says Torabi.
If you have federal student loan debt, you should avoid paying it off too aggressively over the next year, just in case more relief comes in, Torabi says.
Part of Biden $ 750 billion education plan is to write off $ 10,000 in student debt for all borrowers, and the rest of the debt for those who attended public colleges or historically black colleges and universities and earn less than $ 125,000 a year.
“There are a lot of things that have been proposed and a lot to give us hope, in terms of job creation, jobs, student loan cancellation,” Torabi says. “But I think the smart money movement always bets on the individual. What I mean by that is we always have to be accountable for our finances.”
Torabi also recommends taking advantage of the federal CARES law student loan deferral program, until it expires at the end of the year. But be proactive, she said. Stay up to date on any student loan relief and contact your lender first to discuss your options if the relief is not extended until next year.
Private student loans are a slightly different story. If you are having trouble paying private student loans, speak to your lender immediately and try to anticipate financial problems by asking refinance or modify your loan.
“Whatever an administration promises, we should just think of it as the icing on the cake,” Torabi said. “We have to hope for the best, but plan for the same old, the same old. It means doing all of the same things we’ve always done to protect our finances.