So, 2020 wasn’t the year any of us expected so your plans for spending and saving probably took a major detour. If so, you are not alone.
2021 provides a new year and fresh start where we can take control of our finances to get our budget back in shape.
You may be wondering how or where to start so we can help you get started with a few easy tips to create a plan for your financial success in 2021.
Reevaluate Your Goals
Since we all got a little off track in 2020, start by reevaluating and prioritizing your financial goals for 2021. Set a variety of short, mid, and long-term financial goals.
Six months to 5 years
5 – 10 years
Make note of the current savings you’ve put toward each goal. If you’re short for a goal, think about how you can fund that.
Get Your Budget in Order
Once you set your goals, you know what lies ahead. If you have big financial plans such as purchasing a home, renting an apartment, buying a car, or taking out a student loan, now’s the time to take a look at your sources of income and your current expenses.
Take a look at a recent blog that walks you through the steps to creating a budget.
After doing an honest evaluation of your budget, you can see where you need to adjust to achieve your goals.
Set a Savings Percentage vs. a Fixed Amount
Consider selecting a percentage of your paycheck for your regular savings. Too many people focus on amounts, which can be misleading and lock you into a fixed amount when your paycheck may vary. Instead, decide to put aside a percentage of each check you receive, and you’ll be better able to stick with the plan for the long run.
Many people ask how much they should save each month. As a general rule of thumb, you should save 20% of your income but check out this article for all the details.
Also, here’s one of our blog posts that addresses creating a rainy day and emergency fund.
Get Your Tax Refund Fast
If you have money coming to you after you file your tax return, send the forms in via an e-file program as early as possible. And set your refund up for direct deposit into your Members Trust account. Eight out of ten taxpayers use direct deposit to receive their refunds because it’s fast and secure. With Direct deposit, you can have your IRS refund electronically deposited into your account, usually within 21 days.
If you expect to owe money to the government, wait until the official filing deadline, or a few days before, to file and pay.