The Start of 2021 – 5 Financial Resolutions for the New Year

It’s something many of us were looking forward to; the end of 2020 and the start of a new year. Now is a better time than ever to take the right steps and put things in place to improve your financial standing in 2021.

Today we have brought your 5 financial resolutions that you can embark on this year to safeguard your financial future.

1. Save more – Every year you should set a realistic savings goal and 2021 should be no different. An ideal savings plan is to save at least 20% of your monthly disposable income but if you unable to do this, aim for 10%.

2. Avoid unnecessary debt – Debt can be unavoidable at times, but some forms of debt are unnecessary and will only harm your financial wellbeing. Some forms of unnecessary debts are credit cards, student loans, and car loans. If you want to embark on these forms of debt, weigh the benefits versus the short and long-term costs, then decide if it is absolutely necessary.

3. Create a personal budget – A budget may seem a bit constraining, but it can be a useful tool in curbing and monitoring your spending, particularly for persons who may have trouble with excessive spending.

The key is to compile all of your fixed expenses, such as your monthly bills and savings and minus this from your monthly earnings. This leaves you with your disposable income which can be used as you see fit. With this figure, you can then go even further to create a personal budget using some disposable income and keeping the rest to add to savings or to use for investments.

4. Designate a “money day” – At least one day of your week should be designated to money. On this day, you pay your bills, check all of your financial accounts, assess your spending, debts and allocate money for the upcoming week.

Some popular designated “money days” are Saturdays but you can choose any day that works best for you.

5. Plan for retirement – We may think that retirement planning is something to do closer to retiring but it is never too early to plan for retirement. Some steps you can take when putting together any retirement plan are:

  • Set your retirement goals - These goals should be based on your expenses and the quality of life you expect to enjoy during retirement.
  • Calculate your expenses - Expenses never stop, even in retirement. This is why it is crucial to take into consideration all possible expenses you expect to incur during retirement and factor these costs into your plan.
  • Have a timeline - The sooner you start your retirement planning, the quicker you can reach this goal and the shorter your timeline may be.
  • Pay off your debts - All other debts should be paid off fully before starting your retirement savings plan. This allows you to allocate and save freely without the possibility of having to use your retirement fund to pay off any debt. 
  • Manage your retirement income - At this stage you should be completely frugal with your spending and properly allocate your finances towards your needs.

These 5 Financial Resolutions for the New Year will help you to be organised and give you peace of mind knowing that your finances are in order.

Interested in a Savings or Retirement Plan? Contact Guardian Life of The Caribbean Limited at 226-6944 for more information.

Thank you for joining us for our first article of 2021. We hope you enjoyed it and please join us again next week for more!

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