I do not really like resolutions. Often times they are too broad and lack planning. This is why so many of them fail. Making goals specific and achievable is what works. That is what helps us go in the right direction. In this post, I will share with you 21 money goals that you can set for 2021 that can help you have the best year financially. You obviously don’t have to tackle every single goal on this list but if you are looking for a little inspiration, here are a few ways to empower your finances.
1. Start Meal Planning
Planning out your meals in advance for either the week or the month not only saves time but also saves money. This is because a lot of times meal planning will involve building recipes around what you have in your kitchen. This helps you to buy only what you need which can curb some of that impulse spending. It can also reduce food waste which can be just as costly.
2. Spend intentionally
Whether you are buying clothes, electronics or furniture, it doesn’t matter. Before you make any purchase, ask yourself these 3 questions. Will this item add value to my life? Is buying this item more important than reaching a specific goal? Will you use it on a regular basis? If you answer no to any of these questions, do not buy the item at that time. Instead, take the money you would have spent and put it towards debt repayment or saving.
3. Create a financial vision board
Visions boards are great as they help narrow down what is important to you and this direction can keep you focused. Whether you are looking to pay off debt, save money or start a business. Create a collage of images that really inspire you. Once your vision board is completed, post it on an area where you can look at it every day. By keeping a visual of your goals, you will be able to stay focused.
4. Extra Mortgage Payment
What some people do not realize is that making just one extra principal-only payment every year can reduce your mortgage term by 5 to 7 years. Another thing you can do which might be a little easier is to take your mortgage payment, divide it by 12 and then add that amount to each mortgage payment throughout the year. By doing that, you can also make an equivalent of one extra payment. But it is so important to specify that you want the extra money applied to your principal only. If you are paying by cheque, you have to send two cheques. The first one should be for your normal mortgage payment and the second cheque should be for your principal-only payment. In the memo of the second cheque, make sure you write principal only.
5. Teach kids about money
The best time to help kids develop saving and money habits is when they are young. This is because if they can develop a good savings routine when they do not have any bills, it will be a lot easier for them to stick with this routine once they do have expenses. So if you haven’t already, start having conversations about credit, debt, saving money and investing. These conversations are really a win-win for everyone. On one hand, it gets your kids excited about money management and on the other hand, it is an opportunity for you to learn more about money management.
6. Make regular donations
Studies have found that giving is good for us. Generosity can make us happy and lower stress. The same way shopping releases a brain chemical that helps us feel better, researchers have found that giving can have the same effect. So if you haven’t already, make an effort to donate more.
7. Eat out less
Eat out only once a week. We all know that cooking at home saves money. But let’s be honest. We do not always want to eat our own food. Sometimes we just want a night off or something different. The problem is we often treat ourselves a little too much. Going through this year, make an effort to eat out one time a week and that includes whether you are eating out for dinner or lunch. If you are the type of person who eats out a lot and you don’t you can cut back to only once a week, cut the number of times you eat out at least by half.
8. One No-Spend week a month.
Commit to one no spend week every single month and this involves no shopping, no eating out and no spending money on recreation. Whatever amount that you are able to save that week, use it to start chipping away at your debt or use it to build a bigger savings account.
9. Increase your retirement contribution
Increase your retirement contribution by at least one percent. Chances are if you increase it you will not even miss the money. A 1% increase seems like it will not make a big difference, but if you were 35 years old making 45,000 dollars a year and saving 3% of your income, by age 66 you will have an extra 34,000 dollars.
10. Purge your closet.
Before the end of January, go through your closet and remove any item that you haven’t worn in at least 2 years or any item that you do not like or feel that you’re not going to wear in the future. If the clothes are in good condition, you can sell them. Use whatever money you earn to pay off debt or build your savings account.
11. Do Not Add New Debt
Long term debt can rob you of your income and lower your credit rating. If you are to take a credit card, make sure you are able to pay off that balance immediately. That way you avoid paying new debt and you also avoid paying interest.
12. Create a sinking funds account.
This is basically an account where you will set money aside for a future purchase. These purchases can include gifts, a vacation, home improvement or maybe even a splurge. One thing to keep in mind is that a sinking funds account is separate from your emergency fund. These accounts are great because you are able to set money aside for your wants or funds. This means you can have guilt free-spending and you are also less likely to touch your emergency funds for non-emergency purchases.
13. Increase your credit score.
Increase your credit score by 30 to 50 points. Having a high credit score makes it easier to qualify for loans. If you have a low score, make it a goal to increase it. The best way to do this is definitely to pay your debts on time. It is so important that you pay off debt. One thing that a lot of people forget is to check their credit reports. Check your reports often to see if there are any errors.
14. Get a life insurance
This is so crucial especially if others rely on your income for support. But even if you are single, you should still look into a policy because the money that your family receives can help cover some of your final expenses which really takes the financial burden off of them. One thing to keep in mind about life insurance is that it is a lot cheaper and easier to get a policy when you are young and healthy. If you haven’t already, definitely look into getting a policy.
15. Eliminate a subscription
Make it a goal to eliminate at least one subscription service this year. Take the money that you would normally spend on that service and have it automatically deposited into your saving account. So instead of paying that company, you are now paying yourself.
16. Stop a costly habit.
The reality is that sometimes our bad habits cost us more than we realize. Whatever your habit is, go through your statements and see how much you are normally spending on this habit every single month. Commit to cutting that by half in the first month but do not stop there. Continue to decrease how much you spend on this habit every month going through the year. Hopefully, by the time you get to the end of the year, you will have kicked it.
17. Start a side hustle
Make this year the year that you start creating multiple income streams for yourself. Commit to having at least one additional income source by the end of the year.
18. Unsubscribe to emails.
Unsubscribe to sales emails. On one hand, getting coupons can help you save money but they can also backfire because there’s always a tendency to see and buy something you would not have otherwise bought had you not gotten the coupon. Go through your emails and start unsubscribing or if you do not want to unsubscribe have a separate email address for all your coupons. Only check this email when you are looking for something specific.
19. Review budget monthly.
Some people make the mistake of setting a budget but never going back to review or tweak their budget. But throughout the year, your income and your expenses can change. It is therefore important that you sit down and look at your budget from time to time to make sure that your spending still aligns with your goals.
20. Simplify your finances.
Make money management easier and less overwhelming. There are different ways to simplify and everyone has to find their comfort level. Some people go paperless so that they can reduce clutter. Others will automate their bills that way they don’t forget to pay for something. Then again, some people will only use one credit card or will only use cash. The point is to sit down and determine what will make managing our money easier.
21. Start Investing
If you have been putting it off because you find it to be scary or intimidating. Make this year the year that you start growing your money long term. One good thing about investing is that you do not really need a lot of money to get started. Keep in mind that there are different ways to invest. Some people are okay with researching and picking their own stocks while others prefer to use an automated investment service. Regardless of the approach you choose, just make this year the year that you get started.
Last but not least ask for help. If you are struggling with managing your finances and you need guidance, talk to somebody who can help you get on track. This does not necessarily have to be a professional. If you have a friend or a family member who you trust, they are good with money and are responsible, talk to them. They might be able to give you some guidance and tips that you haven’t considered. If you need a professional, you can talk with a financial advisor or you can also speak with a certified credit counselor.