4 Easy Financial New Year Resolutions to Make for 2021
2020 was a hard year financially for many of us. Let's make 2021 better money-wise.
Many of us can admit that 2020 was hard on us - lost jobs, reduced hours, remote work, more spending from being at home more, and so on.....
As it's the "custom" to make New Year Resolutions, I propose we make some financial resolutions as well.
I want to show you some money-saving ideas you can achieve in 2021!
1. Write Down Some Goals
Write down some goals you want for the new year. Do you want to:
- Pay off some debts?
- Replace some items?
- Go to college?
- Take a special vacation?
Just remember to keep it realistic - "winning a million dollars" is not realistic. Now do a little research and find out how much those goals will cost.
Now you need to create a budget (if you haven't already). This book shows you how. Once you have a budget and see where you can cut back and save money (another good way to start saving money), you then put most of the available cash towards your first goal. For your other goals, you put the minimum amount for now. Once you’ve reached your first goal, you then switch the budget to have the available cash focused on your second goal, and so on.
Let's pretend your first goal is to pay off $1,000 in debts, the second goal is to buy a new fridge for $800, and the third goal is a week vacation for $1,200.
Let's say you cut back a lot (bye-bye Starbucks drive-thru) and found an extra $300 a month, now here's a breakdown of what to do:
Starting January you put $200 of your extra money towards paying your debts and $100 for the other goals. It will take 5 months to accomplish goal 1. Now you focus on the fridge, by now you have already saved $250, so it takes another 3 months (total 8 months). Now all the money goes towards your vacation (which you've already saved $400), it takes another 3 months to accomplish.
Congrats! You accomplished 3 financial goals by November! You can use the extra $300 for holiday shopping in December.
2. Start a Savings Plan
Maybe you don't want a complicated "goals" plan, but want to build up some savings. You can initiate this simple savings plan and have a good sum of money saved up at the end of the year.
Each week deposit the same amount to your savings account (or have it automated in your account). Again, having a budget will help find some extra cash to use.
Let's say you only have $20 a week to spare towards your savings account (with a .05% interest rate). This is what your savings will look like by December:
$960 dollars is a nice amount to have to go towards bills, debts, holiday gifts, or wherever you think it's needed the most.
3. Learn New Financial Habits
Take a moment to look back and think about how you spend money - are you an impulse shopper, too busy or tired to cook so you rely on fast food, or must have the latest and newest things?
Maybe it's time to learn how to change your financial habits.
Some great money habits include:
Budgeting - Yes, a budget will show you exactly how much money is coming in and going out. You'd be surprised!
Comparison Shop - Learn to check prices at different places before buying. For example, a gallon of milk at Aldi is $2.49 but only $2.19 at Kwik Trip!
Use a Slow Cooker - For busy nights use a slow cooker for dinners, dump the ingredients in before heading to work and it's ready when everyone arrives home (or finishes remote work and learning in these times).
Shop like a Minimalist - A minimalist asks themselves questions about things they own, things they need, and things to clear out - adapt this thinking when shopping.
Buy Second Hand - Buy things from flea markets, garage sales, and other places. Why does everything have to be brand new? In my own home, most of the furniture and some appliances are second-hand. The only "brand new" items we actually bought were the mattresses and shoes.
There are so many more ideas to cover, but many are found in this book as well.
4. Automate All Your Bills
The last resolution to enact is to automate all your savings and bill payments. Many online banks permit payment scheduling and scheduled transfers.
Automating your money has many benefits:
- Never miss a payment, so no more late fees
- Pay yourself first, savings are transferred before paying bills
- Helps your credit score over time
For those payments that cannot be automated, be sure to mark them on a calendar or set up a reminder on your smartphone or computer to notify you in time to pay.
Many of us know how hard it is to keep resolutions, so much that it has become a joke (and even memes). But, if you want to save money and reach your financial goals - you've got to follow through.
To help you to stay on track create little ways to remind you to keep going. Some ideas care:
- Create notes in your calendar to pop up randomly with your goals on it
- Wrap a picture of your goal (a fridge for example) around your debit card so you'll see it every time you need to use it
- Create goal thermometers and display them where you can see them, color in the new savings amount frequently
- Give yourself a small reward after completing a goal
The whole purpose for making financial resolutions is to get to a better place money-wise than you were last year.
Good luck and Happy New Year!