The new year has officially started and I’m not sure about you, but I couldn’t be more grateful. 2020 was filled with a lot of unexpected events and stress. Although many of us found ways to remain grateful and achieve things we are proud of, I’m glad 2020 is over and am really looking forward to this new year.
At the start of each year, I always make a list of goals I want to accomplish. This year is no different. One of the main categories of things I plan to improve in 2021 are my finances. If you’re also thinking of improving your finances in 2021, here are some money goals to consider:
1. Cut back on unnecessary expenses. I realize this sounds vague but for me it’s all-encompassing. Although I did a good job in 2020 saving and investing money in separate accounts, one the things I want to do better in 2021 is spend less money on things I don’t need. Although I do plan to enjoy my life, I want to be more diligent with my discretionary spending. Particularly, when it comes to my love for wine and guilty pleasure of buying new clothes. Do you also feel you should spend less money on unnecessary things in 2021? If so, what things do you think you can cut back on? What kind of plan are you going to put in place to ensure that you follow through on this goal?
2. Pay off one of my debts. One of my life goals is to become completely debt free. Although paying off all of my student loans (or getting them forgiven) may be a long way away, one of the things I plan to do in 2021 is pay off at least one of my debts. Since I bought a slightly used car a year ago, one of my goals has been to pay it off relatively quickly-which I should be able to do next month. What about you? Do you have a car loan, credit card balance, or student loan that you can attempt to pay off in 2021? If so, consider putting a plan in place so that you can achieve this goal by the end of the year.
3. Establish additional revenue streams to increase my income. 2020 reminded us that our jobs and our current incomes can change. One of the things I want to do in 2021 is become more financially secure by increasing my current income. Although an increase in salary is dependent on my job and other forces I can’t control, one of the things I can control is money that I make outside of my job. For me, that means making more money from blogging or working extra shifts at other medical facilities for added income. For you, it may mean, finding a way to monetize your hobbies and make additional revenue outside of your day job. Creating other income sources gives you more financial protection, allows you to save more money, and makes you less reliant on your day job. Are there additional revenue streams you can explore this year?
4. Save money for a large purchase or fun trip. 2020 taught us that life is unpredictable. Since our health and lives can change, one of my 2021 goals is to enjoy my time off from work more by doing something that makes me really happy: traveling. Since I didn’t get to travel nearly as much as I had planned to last year, in 2021 I plan to make up for lost time, if possible. One of the ways I’m preparing for this is by saving even more money from each check into a “vacation fund” so that I can travel to various places without incurring debt. What about you? Do you plan to travel somewhere in 2021? If so, perhaps you too should start saving even more money into a travel fund. If travel isn’t as important to you, is there an expensive item or gadget that you’ve wanted to purchase?
5. Invest more money by contributing more to retirement. Along with decreasing my debts and saving up money to enjoy a nice trip, I also want to increase my net worth. The two main ways to increase your net worth is to lower your liabilities (aka pay down debt) and increase your assets (purchase things like stocks, real estate, or business that allow your money to increase in value). One of the ways I plan to increase my assets is by investing more money in my retirement accounts, especially my Roth IRA. Contributions in Roth accounts grow and are withdrawn tax free which serve as a huge advantage when I take the money out in retirement. By contributing more to retirement via these Roth accounts, I can invest more money in index mutual funds (which are groups of thousands of different stocks) in a tax efficient manner. This will allow my money to make even more money over time, which will increase my net worth. Are you planning to contribute more to retirement this year?
6. Give more money to charity. One of the things that surprised me last year was how much joy I got from giving. Whenever I sent money or bought someone a gift, I would think of the person’s reaction to the gift or be reminded of how much I was helping someone else and instantly be filled with happiness . As a physician, I’ve been blessed in many ways and one of my 2021 goals is to give more and “pay it forward” to others. Tell me, have you thought about giving more to others? If so, what type of gifts or contributions are you planning to make in 2021?
Tell me, what are some of your 2021 money goals?