The new year is the perfect time to turn over a new leaf with your finances. No matter where you are in your financial journey, there are steps you can take to make 2021 your best year yet.
Financial success starts with a plan. Here are some tips to help you set realistic financial goals that improve your financial security and wellness in 2021 and beyond.
Make a plan for your 2020 holiday spending.
Seeking more financial success in 2021? It starts right now—starting with your holiday spending.
Excessive holiday spending can put you in a hole that you’ll spend the early part of 2021 digging yourself out of. If you haven’t already set up a holiday spending budget, do so now, and think about the entire spectrum of holiday costs, including travel expenses, decorations, and gifts.
If your holiday spending tends to be high, establish a plan to save small amounts of money throughout the 2021 calendar year. By the time the next holiday season rolls around, you’ll be able to enjoy your holiday plans without a hitch.
Create a personal or family budget for 2021.
If you’re looking to improve your budgeting and money management, consider reviewing your spending habits over the past year and identifying opportunities to scale back and improve your net savings.
You should also account for new expenses that might be coming your way in 2021. Are your living costs, such as utilities bills, rent, or property taxes, likely to increase? What about daycare costs, or college tuition? Factor these new costs into your budget to keep your budget in line with changing costs.
One way to structure your budget is to focus on achieving a particular goal, such as paying down debt, building up an emergency fund, or saving for a major purchase (e.g., a car). Review your projected expendable income, and determine how you can use this money to achieve certain goals.
Budget for monthly savings, and set up automatic savings contributions.
Automatic savings contributions offer instant accountability in sticking to your plan. You can also supplement this saving through programs such as Pocket Change, which round up purchases to an even dollar and deposit that extra amount into a savings account.
If you’re expecting a pay raise or an annual bonus, you might also consider using this added income to boost your savings efforts, rather than increase your spending. This can provide an economic boost that improves your financial stability headed into 2021.
Combine a few different savings approaches to set stronger habits and get more value out of your budgeting and savings efforts.
Consider opening an HSA or FSA.
As 2021 approaches, many workers will have the opportunity to open and set elections for new or existing health savings accounts (HSAs) and flexible spending accounts (FSAs).
These accounts pull pre-tax income from your paycheck that can be used to cover medical costs, as well as dentist visits, eyeglasses, and a number of other health expenses.
When used wisely, these accounts can save you hundreds or even thousands of dollars per year on your taxes. Take advantage of these pre-tax accounts to ensure your family is set up to cover standard medical expenses this year.
Reach new financial heights in 2021.
You don’t have to wait until January to set financial goals for 2021. Finish this year financially strong by planning your holiday spending and setting achievable goals for the new year.
Looking for more tips to create a budget that sets you up for success? Download A Complete Guide to Budgeting today.