If you accumulated insurmountable amounts of debt in 2020, you’re not alone. Millions of Americans found themselves suddenly unemployed through no fault of their own. While states offered unemployment benefits, many people with higher-paying jobs fell short of meeting their financial obligations.

With talks of a possible third stimulus check, you may consider using the money to help pay down debt. However, it will only assist with the problem short term. Thankfully, there are other options at your disposal and lifestyle changes that can help speed the recovery and promote a bright financial future.

Relief From Debt

Before you can achieve comfort regarding your finances you need to reduce your debt. High credit card balances and being able to pay the bare minimum payment required is a recipe for disaster. The balances will remain stagnant as the interest continues to accumulate. While prospects of a stimulus check are looming, using that to pay down debt isn’t going to provide the results you need. Fortunately, there are a few ways to get a handle on your debt sooner.

You can apply for a debt consolidation loan. This will give you a single payment due each month with a much lower interest rate. Just make sure to find a reputable lender. Another option is to apply for a credit card that offers balance transfer, interest-free, for a period of a year or so. Finally, you can use expert tax services to get a maximum refund and use this money to pay down credit cards and other debt you’ve accumulated.

A Stringent Budget

Difficult financial times call for tough decisions regarding your money. Even with limited monetary resources, you can see light at the end of the tunnel. Make a comprehensive list of everything you pay out each month.

Make sure to add in things like taxes and school tuition that come along only once or twice a year. With regard to your utilities, add up a year’s worth and divide by 12 to ensure you collect enough to cover the summer and winter months where consumption is higher.

The Chopping Block

Once you have the figures in front of you it’s time to take a hard look at your monthly expenses and find ways to reduce the numbers. Some, like your cable bill, are easier than others. Contacting the cable company and switching to basic service can result in more than a hundred dollars saved.

Bundling homeowners and auto insurance with the same carrier is another way to free up money you can add to clean up debt and buy food and essentials for your family. There are many other ways to reduce overhead costs. Replacing traditional bulbs with LEDs, upgrading a thermostat to a digital model and running appliances like your dishwasher and washing machine during non-peak hours.

Build Savings

Better than half the workforce has little or no savings. Unfortunately, this way of life, chosen or not, sets you up for financial turmoil. If 2020 taught you anything, it’s to prepare for the worst. If it doesn’t happen, you have money saved to enjoy life. While financial experts vary on the amount you should have saved, they mostly agree with three to six months’ worth of cash to cover their bills and expenses. This will give you a better chance of coming out on top with a short-term shortage of income.

Job Security

While there truly is no such thing as job security, you can improve your chances with higher education. Millions of Americans have difficulty with their finances because they simply don’t earn enough. Use recent events to motivate you to earn a degree. Many colleges offer online classes at a lower cost due to the pandemic. Take advantage of this opportunity and reap the benefits of financial stability.

Life isn’t always easy. However, if you use the unexpected events of last year to improve your financial standing, you’ll end up on top. Create a budget, reduce debt, build savings and find ways to lower monthly expenses where possible.