This year has been a tough one for many people financially. With the pandemic ongoing, many of us have been furloughed, had our income cut, or lost our jobs altogether.
Now that the New Year is nearly upon us, many of us are thinking about resolutions and ways to improve ourselves. And there are few more important improvements than improving your ability to handle your finances.
Below are a few tips for setting realistic financial goals for 2021.
Evaluate your current financial situation
You can’t set financial goals without first getting a firm idea of where you are right now. Whether you want to earn more, spend less, or somewhere in between, you first need to understand how much of those things you are doing now – then work to improve them. Getting a holistic overview of your financial situation will help you set realistic goals for the future.
Set a budget
In order to meet your financial goals for 2021, you’re going to have to set yourself a budget for what you’re allowed to spend on a monthly basis. Take into account your income (wage, bonus etc.) and expenditure (rent or mortgage, bills, food, travel). Whatever is left is what’s known as your disposable income – that’s where you’re going to want to set some restrictions in order to make savings.
Stick to your budget
This deserves it’s own header because it’s very easy to say, but much harder to do. A lot of us have a strange relationship with budgets. We set them for ourselves, and then decide when we want to adhere to them and when we don’t. If you want to meet your financial goals in 2021, you have to stick to your budget, no ifs or buts. The best way to do that is by leaving yourself some wiggle room in the budget in case something unexpected comes up.
Create an emergency fund
We all come into unexpected expenses from time to time, whether it’s a burst pipe, a dental emergency, or an energy bill that’s gone through the roof. But if you want to achieve your financial goals in the New Year, it pays to expect the unexpected. Set aside a sum of money that’s not to be touched, except in case of emergencies. That way, your budget won’t break down the next time your boiler does.
Pay off your debt
It’s hard to achieve your financial goals with debt hanging over you. If you have debts you’re struggling to repay, or creditors chasing you for payment, it may be time to seek debt advice. Once you talk to an expert and get yourself on a settled debt repayment plan, you’ll find yourself back in control of your finances, and ready to take on 2021.
Where can I get extra financial support in 2021?
This year has left many people struggling to make ends meet. While we all hope that by early 2021 the pandemic will be over, unfortunately the financial impact will be longer lasting.
If you have money problems you’re struggling to cope with, we can help. Carrington Dean is Scotland’s biggest and best known debt solutions provider. Our team of experts can offer you free money advice and help you get back on the right track.
