The start of a new year is the perfect time to make changes in your financial health. Looking back on last year, you may not be delighted with your spending, savings, and strategy. You may feel like your financial management went wherever the wind blew it.

But, don’t despair. It may not be as hard as you think to finish this year in much better financial shape than last year. Several small adjustments can snowball into big changes for you — positive changes.

Here are fifteen steps you can take, starting today, to make 2021 a banner year for your finances.

1. Negotiate your salary

There are two primary ways to save money: spend less or earn more. The latter is much more fun. If you’re an asset to your company or soon-to-be company, ask, and you just might receive. Show management a list of your professional accomplishments and how you’ve helped the company succeed. This can help bolster your case for that well-deserved raise.

2. Use a budgeting tool

It’s hard to stick to your spending plan, but the right budgeting tool can help you improve your financial health and reach your financial goals. You can use a paper and pen, or one of the many digital tools available like You Need a Budget (YNAB) or Mint.

3. Actually have a budget

There’s no use in having a budgeting tool if you don’t have a budget. What are your debts each month (rent, utilities, entertainment, installment loan payments, etc.)? What’s your monthly income? Is there a surplus each month? Where can you cut expenses? There are many good books and online tools to help you create a monthly budget that will make a massive difference in your financial success.

[ Related read: 26 of the best personal budgeting tips, from A to Z ]

4. Consider a side hustle

If you can’t reduce your expenses to balance your budget, use your talents with a side hustle or part-time job to increase your income. You can contract your talent as a freelancer through several reputable apps or find seasonal work. There’s a big demand for hard-working, talented people; cash in on your skills.

[ Related read: 10 practical side hustle ideas to make extra money in 2021 ]

5. Capitalize on employee benefits

What benefits does your employer offer? Retirement plans with contribution matching, insurance plans like health, life and disability insurance, educational benefits? Open enrollment in the fall is the perfect time for you to evaluate and select employee benefits that will offer you financial protection today and help you save money for the future.

Buy a personal disability insurance plan online with Breeze.
What's your gender?
What's your birth date?
Do you use nicotine?
What's your ZIP code?
What type of worker are you?


Do you work at least 30 hours per week?
What is your net annual income?

i.e. Your income less any expenses

How would you categorize your current job?



Which one best describes you?


icon sad
Sorry

6. Build an estate plan

In addition to having a will, designating guardians for young children, considering trusts, understanding, and planning for estate taxes, and updating your beneficiaries on financial accounts such as life insurance and retirement accounts will make it easier on your loved ones when you die and give you peace of mind today.

7. Switch to a streaming service

If you’re still watching cable TV, you’re probably watching a chunk of your monthly budget go to your local cable provider. Cable is expensive. Take a look at streaming services like YouTube TV, Hulu, Disney+, and others. They can often be combined to give you all the channels and movies you want at a price that will make you smile.

8. Change banks if needed

Does your bank charge high fees and pay low-interest rates? Is it inconveniently located? If so, changing banks might be a smart move. Yes, it’s complicated making the change when you have to redirect your automatic bill pay and payroll deposits, but it’s often worth it. If you never need to go to a local branch office, consider online banks for better interest rates and lower fees.

9. Manage your finances as a couple

Each partner needs to understand the family’s finances and be able to assume responsibility if they divorce or the money-manager of the family dies. Confirm you’re on the same page with your finances and know each other’s financial tendencies, like overspending. Couples are not always in synch financially; work together as a team despite your differences.

[ Related read: A stress-free guide to combining your finances after marriage ]

10. Know your numbers

When it comes to your finances, ignorance is not bliss. It leads to financial devastation and often to bankruptcy. Know your budget numbers, assets and liabilities, tax bracket, withholding, and net worth. Knowing these will help you with spending, saving, and other aspects of your life.

11. Spend less on exercise

Gym memberships, boutique fitness classes, and personal trainers can add up, especially if you’ve continued to pay for them during the pandemic. Some strategies to help you save here are building an inexpensive home gym, buying fitness classes in bulk, and using workout apps. You can feel fit and look good without spending a small fortune.

12. Build an emergency fund

Many people lie awake at night wondering what they’ll do if the car dies or the air conditioning unit needs to be replaced because they have no money set aside for more minor emergencies like these. Having an emergency fund of 6-12 months of your living expenses will take a tremendous amount of pressure off you financially and be a big win in 2021.

13. Sell your stuff for cash

Do you have a lot of unused items that are just taking up space? Many people will pay good money for what you no longer need and a myriad of websites to help you do it. ThredUp, Poshmark, and Gazelle are just a few. Laptops, golf clubs, baby items, clothing, and pet supplies are always good sellers online.

14. Eat at home more often

It’s not fun to cut back on dining out if you enjoy being served and having someone else do the dishes. But if you aren’t carefully tracking your budget, you’re in for a rude awakening when you calculate how much you’ve spent eating out in the past month. Even takeout and delivery add up. Learn to use an Instant Pot or slow-cooker to make easy, nutritious meals at home. Keep plenty of non-perishable dinner ingredients in your pantry. You don’t have to be a gourmet cook to enjoy dining at home.

15. Advance your financial literacy

Take a class, read a book, listen to a podcast. Make 2021 the year you become a student of personal finance. It’s fun and interesting to explore concepts and strategies to improve your financial literacy.

[ Related read: Why financial literacy is more important now than ever before ]

Bottom line

2020 was a challenging year in so many different ways, and many families struggled with their finances. Don’t feel alone if you’re not happy with how last year went for you financially. You’ll do better if you look ahead to this year and begin implementing some of the changes we’ve looked at. Start by picking out two or three and make those changes first. With some effort and flexibility, 2021 can be a much better year for you.


Having grown up in upstate New York, Bob Phillips spent over 15 years in the financial services world and has been making freelance writing contributions to blogs and websites since 2007. He resides in North Texas with his wife and Doberman puppy.

The information and content provided herein is for educational purposes only, and should not be considered legal, tax, investment, or financial advice, recommendation, or endorsement. Breeze does not guarantee the accuracy, completeness, reliability or usefulness of any testimonials, opinions, advice, product or service offers, or other information provided here by third parties. Individuals are encouraged to seek advice from their own tax or legal counsel.

Money
Published April 09, 2021