5 tips to get financially realigned for 2021
January is here, and the beginning of 2021 has us all wondering, where did 2020 go?! With 2020 done and dusted (good riddance!) and January upon us, it’s a great time to evaluate our financial activities for the year that was, and prepare for the year ahead. Here are 5 financial tips to help get you on track for 2021.
1. Revisit your budget
For most people, the budget they set for 2020 probably looked nothing like what was shown on the bank statements. For some people, they saved more than they would’ve thought, and others, online shopping became their favourite pastime. Whatever the case, take the time to look at your budget for 2021. To do this, it helps to think about the following:
- Where did you spend most of your money in 2020? (Bank statements can help you identify this)
- Did your spending align with your financial goals in 2020?
- What are your 2021 financial priorities?
Websites like Money Smart offer budget templates to download and help you get your spending as concise as possible. Get this done, and you’ll be in much clearer head space when it comes to your finances in 2021.
2. Take the time to reflect on 2020
Understanding that a pandemic might have got in the way of your 2020 plans, has last year helped you realise what you financially want moving forward? For people who lost their jobs or were stood down, perhaps the notion of an emergency account seems more attractive now and you can work towards building that up in 2021. For others, the savings accrued might make that first home purchase more feasible in 2021 than was originally thought. Take the time to evaluate 2020, and identify what you learnt and will take forward into 2021.
3. Don’t dare to compare
We’re all on a different journey, and our financial situation will differ from others. It’s important to keep in mind that no one’s situation is the same, and for that reason, you shouldn’t feel bad about where your finances are at compared to your friends or family’s. Ensuring you’ve sorted out your financial goals and your budget aligns, you can enjoy 2021 feeling comfortable in what you want and can achieve, regardless of what others might do.
4. Invest in yourself
For some people, 2020 saw them become unemployed and unable to find new work. For others, it might have caused them to evaluate what they really want out of life, and the current work they’re doing doesn’t align. Investing in yourself is like investing financially. The best time to start was yesterday, but the second-best time to start is right now. This year you could invest in learning a new skill. With platforms like YouTube and websites for blogs, there’s almost nothing you can’t learn for free. Learning a new skill also demonstrates commitment and discipline, traits that are highly desirable by employers. Of course, constant learning shouldn’t just be for the unemployed, we should all continue learning and strengthening our skill set. With new skills comes new opportunities which can help in building up those bank accounts.
5. Set clear financial goals
Now that you’ve reflected on 2020 and got your budget in order, it’s time to set some goals. They can be as small as saving $10 a week, or as big as buying your first home. Whatever they are, write them down and make them as specific as possible. 2020 showed us that the housing market remained strong and stable, with expected growth in 2021, and with grants like HomeBuilder and First Home Loan Deposit Scheme available, becoming a homeowner in 2021 might be a great financial goal for many.