2020 was rough year for most of us. One thing it did do though is make a lot of us take stock of where we are in life, and many of us re-evaluated our jobs and our finances. 2021 will hopefully be a better year, but we can’t live on hope so let’s look at how we can make ourselves more financially secure this year.
Learn to budget
Create your own budget in five simple steps.
The basics – Work out your income and expenses and see how much cash flow you have right now.
Remember A.T.E. – Automate, Track spending and build an Emergency fund.
Identify your values – Choose budgeting principles that make sense for you.
Set up a Frequent Outgoings Budget – You should know exactly where the money for your bills will come from, then on payday automatically sweep that money into a Frequent Outgoings account.
Set a Goal
What do you want to accomplish in 2021?
Do you want to earn more money?
Do you want to spend less on frivolous purchases?
Do you want to go on a big holiday as soon as we can travel again?
Do you want to learn how to invest?
Set a specific goal for whatever you want to accomplish.
Goal setting is good because even if you don’t attain the goal, the fact you were motivated to act means you will be closer than you would have been otherwise.
Set Milestones
Milestones are simply smaller goals that help you get to your larger goal. They serve to keep you on track.
For example – paying off debt the milestones might be:
Set up a budget to work out much money you have
Calculate out how much money you need to set aside per month to get all your debt paid off in 12 months (or 18, 24 etc).
Celebrate after each credit card is paid off.
Increase your income
Easier said than done but there are four ways you can do this:
Apply for promotion at work.
Ask for a raise.
Find a new, better paid job.
Start a side hustle.
These might not be immediate solutions, or even possible ones, but they are worth thinking about very seriously. Employers can say no to promotion or a pay rise, but they might say yes if you can persuade them you are worth it. Despite 2020 being a pretty rubbish year there are jobs available and one of them might have your name on it. And many of us have a skill we could monetise if we had to.
The best part of the above plan is that you can implement all or part of it no matter how 2020 went for you!
I wish you all a more financially secure 2021
By Harry Mitchell-Davis