2021 Financial New Year’s Resolutions
What are your 2021 New Year’s Resolutions? If you don’t already have resolutions in the financial space – or even if you do – here are a few to consider taking up.
New Year’s Resolution #1: Build an Emergency Fund
If nothing else, 2020 proved to us that life is unpredictable. Even huge, profitable industries such as restaurants, events and travel can be brought to their knees by something like a virus.
That’s why an emergency fund is critical. It exists for one reason: to pay for these unexpected things that will come up in your life.
- You lose your job or your partner loses theirs
- Your parent gets sick and you need to take care of them
- The car breaks down
- Your HVAC system stops working
- Your dog gets bit and needs care from the vet
This stuff happens. When it does, you need an emergency fund to pay for it. How do you build an emergency fund? The easiest way is to have money sent directly from your paycheck into the savings account. What doesn’t hit your checking (and you don’t see) you don’t spend.
New Year’s Resolution #2: Pay Down Debt
Debt is a horrible weight on our shoulders that we’re constantly carrying around.
Keep in mind this isn’t just “bad debt” like credit card debt. All kinds of debt- from student loans to car payments to mortgages – are obligations that cause extra stress in your life.
Can you pay off everything in one fell swoop? Probably not – although that’s impressive if you can.
But even if you can’t do it all at once, set a resolution to pay a lot of it off this year. Maybe you can finish paying off that student loan. Or your car has 15 months of payments left, and you think you can find the money to get it paid off in 12.
The key to paying off debt is to be aggressive about it. The faster you pay it down, the more money you can dedicate towards the principal instead of just the interest.
New Year’s Resolution #3: Set a Goal for Retirement Saving
How much money did you save for retirement in 2020? If you’re like a lot of people, that was the least of your worries. Maybe you lost your job so you were just trying to pay the bills. Or you got sick and ended up with a lot of medical bills.
Either way – consider setting a goal for retirement saving this year. Even though retirement may be a long ways away, it pays to save now. Let your money grow so you have enough in retirement to live.
Can you save $100 a month? That comes out to $1,200 over the course of a year.
Maybe you could save $200 a month? Now you’re at $2,400, which is a nice chunk of change!
New Year’s Resolution #4: Cut Down on Bills
How do you get the money for these other things we’ve talked about? The best place to start is by lowering your monthly expenses. Consider not going out to eat quite as often. Cut the cable bill and go with a streaming service instead. Get quotes on insurance to lower your monthly premiums- I’m sure we can save you some money. Just send us an email at info@partnersdirectins.com and we’ll see how we can help.
Conclusion
2020 was a rough year, but 2021 can be incredible. To make sure that happens, set some great financial resolutions for yourself. Happy New Year!
