8 Financial Moves to Make 2021 Better Financially

Just in case you weren't paying attention, 2020 has been quite the year, to say the least. With only one a few days left in the year, everyone is ready to put the year behind us and try to start fresh. From the coronavirus pandemic to economic shut downs, many have felt the financial strain. If you are looking to start 2021 off on a better financial note, these eight moves will (hopefully) help make your year less stressful and put you in a better place financially. 

Financial Move #1: Spend Smartly

Make your 2021 mantra an easy one: spend less, reduce stress. Before you buy, ask yourself "will this actually improve the quality of my life?". If the answer is no or if it will just add clutter to your home (which can also add stress) then skip the purchase. 

You can start small, by doing things such as:

• Foregoing your morning latte and brewing a pot at home instead
• Cooking at home rather than going out to dinner.  Need recipes?  Check out our weekly recipe in every newsletter
• Not buying new clothes regularly (With Zoom meetings, you really only need the top half to look good anyway!)
• Look at monthly subscriptions you no longer use.  (Not in the car much?  Maybe you don't need that Sirius XM subscription)
• Waiting a few days and really considering each purchase to limit impulse spending 

The above things can become a lifestyle change and something that you can implement into your everyday life. 

Financial Move #2: Reduce Debt

Getting rid of, or at least reducing, your credit card debt can relieve an immense amount of financial stress. Start by paying off the credit cards that have the highest interest rate before working your way down the line to lower-interest loans. Making small changes can start becoming more of a lifestyle, therefore making it easier to reduce your debt. Some like to pay off the smallest balances first.  I'm happy to walk through which option is the best fit for you.

Financial Move #3: Track Expenses

If you track exactly where your money is going, it will give you a greater idea of where your overall financial picture stands. Simply understanding where your money is going can help you to really own it, which in turn, can start to reduce financial stress.   I can provide you with a simple monthly expense tracking sheet

Financial Move #4: Trade “Stuff” for Experiences

While you are still spending money here, research shows that people enjoy experiences more than possessions, so this is a great way to make better use of our money. Rather than buying a new outfit, you could spend your money on:

• Cooking classes 
• Traveling (when safe to do so).  I did a hike to the top of Mt. Katahdin in September and it cost me less than $200. I'll remember that experience the rest of my life
• Art classes.  They offer only options today.
• Spending more time with friends and family. Game night, Karaoke, dancing.  All pretty low cost

Whatever it may be, this will prevent stress and burnout while providing you with positive memories. 

Financial Move #5: Read Financial Success Stories 

Simply reading success stories is a great way to change your mindset when it comes to a healthier financial lifestyle. If you read about people who have been in your situation and were able to pay off debt, start earning more money or just overcome some type of financial hardship, then you can become inspired and start to implement these tactics into your own life.   I've heard countless stories over the years I'm happy to share for some inspiration.  Although not everyone can do this, I had a young couple years ago that wanted to buy a house.  Their current expenses didn't allow them to save much but they were willing to really rough it for a year.  They basically camped for a year and saved about 25k toward a down payment.

Financial Move #6: Create an Emergency Fund

It can be difficult to comprehend creating an emergency fund when you are already financially stressed. But whenever you can, put any extra money aside at the end of the month into an emergency fund for unexpected expenses, such as house repairs, car repairs or healthcare costs.  We can help you set up an account that allows you to automatically transfer money monthly to a savings account so you don't have to think about it.

Financial Move #7: Start a Spending Plan

Once you’ve worked diligently to reduce debt and build an emergency fund, start a spending plan. When you do this, you’ll need to track your income while making a plan for all that you are earning. You can prioritize your spending once you have allocated the funds to cover expenses. This should hopefully help you breathe a little easier as you spend money while staying on track.

Financial Move #8:  Reach Out to Me for Help

I'm happy to help set you on a better path to meet your financial goals.  

2020 has been hard on everyone, personally, professionally and financially. As we prepare for the upcoming year, use these tips to help reduce financial stress as we all work towards a better year.