7 Financial Goals You Should Be Setting for the New Year
The New Year is finally here! With all that has come about unexpectedly this past year, making sure your finances are in check is more important than ever.
If you haven’t thought about creating some resolutions for 2021, here are some financially-focused goals you should be setting for this year.
1. Track Your Expenses Regularly
First things first: Schedule time to take a look back at previous years to get a good idea of how much (generally) you’re spending per month.
This will allow you to set a budget (if you don’t have one already), and have a clearer picture of how much money you can realistically save. Not only that, but it can shift your mindset and force you to think through on all your purchases.
If you’re unsure of how to get started there are many expense tracker apps out there to help you get the job done.
2. Crack Down on Hidden Fees and Unnecessary Spending
Now that you’ve taken a good long look at your spending, it’s time to crack down on your shopping habits, and examine any hidden fees you may be getting hit with.
First, take a look into any unnecessary purchases on your end, from those streaming subscriptions to frequent take-out. Limiting your spending may be difficult at first — But with a change in mindset it can prove beneficial to your wallet.
Unnecessary fees are likely to appear in the picture if you’re using a bank account or financial service. From late payments to overdraft fees, your financial institution *could* be charging you more pointless costs than you realize.
To ensure you’re saving more money in the new year, consider switching to a financial service with no fees to help you save up more every month. While a few dollars a month may seem too small a difference to deal with the hassle, it could add up over the course of 2021 and set you up for greater financial success.
3. Set up or Increase Your Retirement Contributions
Retirement may be decades away for you, but it’s never too early to start planning for it ahead of time.
If you already have a 401(k) or other IRA with your employer, 2021 may be the year you increase your contribution to prepare yourself for the future. In contrast, if you do not have an IRA or retirement plan, now is the time to get one!
If you’re unsure of how much of your income you should be putting into your retirement, use a retirement calculator to figure out exactly how much you will need to have saved. This will allow you to better understand what percentage of your income should be going toward your retirement.
4. Tackle Any Debt You Have
If you are struggling with student loans, credit cards, or any other type of debt, you’re not alone.
According to a study by CNBC, the average American is in over ninety thousand dollars in debt. That’s a lot of money to pay back — and even more stressful if you don’t have a plan of attack.
Take a look into all the costs you need to pay off and track them in an excel sheet to stay as organized as possible.
Even if you’re paying them off over time, taking an honest look at how much you’re actually chipping away at per month could make you realize you need to put in more money to pay them off during a more specific and consistent time frame.
There are a lot of techniques and tips on how to pay off your debt and what plan to use, so do your research and make a long-term plan for utmost success!
5. Make a Plan for Any Big 2021 Purchases
Even though you’re planning ahead for retirement and debt pay-offs, that doesn’t mean you won’t also need to make big purchases in the new year.
For example, if you’re looking for a house or new apartment, you’ll want to get pre-approved for a mortgage and have a precise budget to go by. This will ensure you are truly prepared for these big expenses and ready to take them on!
6. Ask for a Raise or Pick up a Side Hustle
While focusing on your spending and monthly expenses is important, so is taking a look at your monthly income.
Asking for a raise during a pandemic may seem like a bad idea — But if you’ve been able to succeed at your job while under the stress of quarantine, it’s likely well deserved.
However, if you’re struggling with your employment status or are unable to secure a raise, an additional side gig may be just what you need to elevate your income.
Check out some of my side hustle ideas on how to make some extra cash right from the comfort of your home.
7. Be Prepared With an Emergency Fund
If 2020 taught us anything, it’s that we should always be prepared for the unexpected.
That’s why creating an emergency fund should be one of your most important personal finance goals for 2021.
It’s recommended that you have at least three months’ worth of income saved up in a savings account for unexpected expenses — like emergency room trips and car accidents.
If you’re not sure how to save up this money or where to begin, be sure to check out these emergency fund strategies and tips for creating one that’s perfect for your preferred financial plan.
This will not only be a smart way of staying prepared for life’s surprises, but will also serve as a security blanket to give you financial peace of mind.
Getting yourself in a place of financial security and a strategic mindset is something that won’t be easy.
Let’s face it, retail therapy and take-out everyday sure is tempting…
But with a focused mindset and a little bit of planning ahead, you can be sure your finances are being used wisely and you’re setting yourself up for financial victory.
While any time of year is a great time to make positive changes to your financial outlook, many set out to make these sort of changes for the new year, since there is the opportunity to start out fresh.
Take this time to reflect upon any changes you’d like to make to your financial goals and dreams.
By following the 7 steps outlined above, you can start making modifications to your money mindset to set you on the right path for your financial future.
Your turn — What do you think of this list of top 7 financial goals for the new year?
Do you have any other money tips or financial goals you would suggest?
Agree, disagree, just wanna say Hi? — Hit me up in the Comments!
7 Financial Goals You Should Be Setting For The New Year
Robin is a full-time business professional who has worked in the insurance industry for over 20 years. She is also a personal finance blogger who shares her first hand experience with the struggles of money and debt. On Mastering the Side Jam, she focuses on ways to maximize efficiencies to make & save money, pay off debt, and live your best life.
She has been been featured on The Money Mix, Rockstar Finance, The Financial Diet and Women’s Money Talk, and has been quoted in various online publications.