With the hardships that 2020 brought on, many of us could use a financial tune-up in the new year, or, maybe you are looking to reach new heights in your financial goals for 2021. We want to share a few tips for getting your finances in check.
1. Write Down Your Motivation
To start out your year of amazing finances, write out why making and managing your money is important to you. How will good financial habits improve your life? What are your goals for your financial situation at the end of the year? These notes will act as a reminder, to help you stay on track with your new habits. We like to use Canva to create graphics to decorate our workspace with motivational quotes and reminders.
2. Get Your Credit in Check
Having a good credit score means savings and benefits, including access to loans and credit cards with the most favorable terms. Start by checking your credit score and then deciding where you might be able to make improvements. Improving credit score can be done by regularly paying off bills or debts and keeping balances on your credit card low. If your credit score needs some serious work, you’ll likely want to evaluate your credit score with an online source such as www.creditrepair.com.
3. Get Your Taxes Done Early
Tax season is coming up soon! Get your documents together as soon as possible and avoid unnecessary stress by getting your taxes done early. This way, you can focus on other important financial goals and feel peace of mind knowing you’re already done with your taxes for the year.
4. Set a Budget
Regardless if you’re living paycheck to paycheck or have plenty of money left for saving, budgeting is one of the most important tools in your financial tool belt. Setting a budget allows you to exercise discipline when it comes to how much of your money is going to be used for everyday expenses and necessities, invested, set aside for emergencies, or used for your favorite recreational activities- because you deserve it! Make sure to write down your budget and update it constantly. There are plenty of printable budgets online! Check out this one.
5. Make a Savings Goal
After you’ve created a budget for yourself, see where you might be able to save. Make sure your savings are realistic and attainable so that you can stick to it and watch it grow over time, but also save as much as you comfortably can. The more you save now, the more that money will multiply or compound as time goes on. Each paycheck you receive, put your chunk of savings aside first before anything else. If your savings are the first part of your budget you pay, they’ll be much less likely to get left out.
6. Pay Off Debts
Paying off what we call “bad debts” is one of the most important parts of your finances. High interest, bad debts such as credit card debts and personal loans decrease your worth at a compounding rate, rather than growing it. It feels like a great year to become debt free or at least “bad debt” free!
If you haven’t already started investing or want to expand/diversify your investment portfolio, take some time to research companies and market trends. While there are plenty of opportunities to buy great stocks at great prices, it still isn’t extremely often that the market puts high-value companies on sale. This makes it important to start researching the companies that you would like to invest in so that when these companies do go on sale, you’ll be ready.
If you have a hefty amount of money invested or are looking to dive into investing, it is a great idea to get a professional here at Penny Lane to help you with your portfolio.
8. Get a Financial Planner
Once you’ve established your financial undertakings and start saving, it’s time to take your financial portfolio to the next level. Getting a financial planner will help you feel confident and calm knowing that your money is where it should be, seeing your money grow and being protected into the future. We’re here to help.
Let’s get our finances in check this year with these 8 financial habits for success!