14 Tips To Meet Your Financial Goals In 2021

Who among us isn’t ready to bid good riddance to the year 2020? The pandemic has upended life across the globe and that includes creating financial chaos and stress for people of all walks of life. The good news is that 2021 is just around the corner. The bad news is that there will be pandemic fallout to deal with in the year ahead, and that could mean a continued rocky ride for your personal finances.

That doesn’t mean postponing or eliminating financial plans and goals altogether. And it doesn’t mean 2021 will be a bust. Instead, you’ll need to be more focused, savvy, and strategic about money goals in the coming year, which is why we asked financial experts across the country to weigh in and provide tips and insights about how to prosper financially in 2021 despite all the uncertainties that lie ahead.

Related: 19 Smart Ways to Get Through a Recession

Create a Rolling Budget

In times of uncertainty, it’s a good idea to create what’s known as a rolling budget, which is a budget that’s dynamic and changes throughout the year. This type of budget typically focuses on the near term, rather than the long term.

“You can’t always foresee every stumbling block in your financial future, so make sure to keep your budget bendable, not only judging the numbers you see at the moment but also make room for the surprises,” says Roy Ferman, founder and CEO of Seek Capital. “Keep a rolling budget and forecast that accounts for potential fluctuations — positive or negative.”

In other words, budget in a way that accounts for multiple real-world scenarios, says Ferman, creating a plan A, B, C, and possibly even D. “You want each plan fully mapped out as if it was plan A to keep you on top of any discrepancies. Allow yourself to come up with different variations, and allocate for those variations.”

Establish More Than One Stream of Income

Depending on how you define the data, anywhere from 20 million to 30 million people were unemployed or had their income affected by the pandemic, says Marco Sison, financial coach for Nomadic FIRE. To help protect yourself against the impacts of unemployment or reduced income, it’s a good idea to establish multiple streams of income.

“If one job or income stream is cut off, you still have other sources coming in to live off of,” says Sison. “Ideally, these income streams are passive: dividends, rental property, digital side businesses. If your hours get cut, or you lose your job, you can reduce your expenses and live off your side hustles without tapping your emergency fund.”

Budget for Saving

Warren Buffett has been quoted as saying “If you want to make saving a priority, take a look at how you budget. Do not save what is left after spending; instead spend what is left after saving.”

If you truly want to make saving a priority, particularly amid challenging economic times, you cannot plan to simply set aside what is left over, says Robert Johnson, a professor of finance, at Creighton University’s Heider College of Business. “You don’t successfully build wealth by simply taking what you have left after all your expenses,” says Johnson. “We accomplish what we prioritize. Prioritize savings and invest those savings. Saving should be a line item on your budget.”

Develop an Investment Policy Statement

Anyone who makes investments should create what’s called an investment policy statement (IPS) and follow it, says Johnson at Creighton University. “An IPS is a written document that clearly sets out an investor’s return objectives and risk tolerance over that investor’s relevant time horizon, along with applicable constraints such as liquidity needs and tax circumstances,” explains Johnson. “The whole point of an IPS is to guide you through changing market conditions. It should not be changed as a result of market fluctuations.”

Avoid Credit-Card Debt

Credit-card debt is a slippery slope in the best of times. And when the economy is uncertain, it’s best to avoid using credit cards as much as possible. “It’s never advised to spend money you don’t have via revolving lines of credit. And psychologically making purchases via most credit cards makes us a lot less frugal and undisciplined,” says Adem Selita, CEO and co-founder of The Debt Relief Company. “Considering that interest rates are near all-time lows, paying 20% or more on credit-card debt is a terrible financial decision to make.”

Clear Outstanding Debts

One more note about credit-card debt, if you’re able: Wipe out all existing debt. That will be the biggest favor you can do yourself in terms of meeting financial goals in 2021 and laying the groundwork for success (and beyond), says David Meltzer of East Insurance Group. “Chip off your debt bit by bit by paying off a small portion each month,” says Meltzer. “And do some belt-tightening on your spending for the time being. Take a look at your expenses and see which ones you can let go, and which ones you need to minimize, in order to help clear debt.”

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Streamline Your Budget

Study your cash flow, both your income and expenses and outline a realistic household budget, says Meltzer at East Insurance Group. “Your expenses should be exclusively necessities like house bills, groceries, food, mortgage, insurance, and savings,” says Meltzer. “There’s no room for gym memberships and Netflix subscriptions on a tight budget. Most importantly, keep track of your spending. At this point, each cent counts.”

Consider Living Below Your Means

While you’re busy outlining your month-to-month budget goals for 2021 and paring back your spending, you might consider establishing a plan to live well below your means.

“By spending less than you earn, you open up funds to put into a savings account for emergency situations, such as a pandemic, or the loss of a job,” says Mason Miranda, credit industry specialist for Credit Card Insider. “The more you save now, the more financially stable you’ll be later when a crisis hits. Depending on your goals and how much you can save, you could even avoid going into debt and pay for large purchases in cash.”

Prioritize Your Goals and Be Realistic

Prioritizing all of your financial goals allows you to put them into specific categories based on which goals you want to meet first, says George Birrell, CPA and founder of TaxHub. You’ll also want to set a realistic time frame for meeting those goals amid the uncertain economic landscape.

“Setting a realistic timeframe is very important,” says Birrell. “If you set a timeline for one year, but your expenses don’t allow for meeting that timeline or you don’t have the capacity to put in extra work to earn more, you’re not going to reach that goal. Look at it objectively and realistically.”

Set Milestones Toward Larger Goals

Think of a milestone as a smaller goal that helps you get to your larger goal, says entrepreneur Thierry Tremblay, CEO founder of the online database software company Kohezion.

“They are like guideposts on the trail — smaller tasks that you can do to help you stay in line with your overall goal,” says Tremblay. If you fail at various points along the way when pursuing financial goals, think of it as an opportunity to gain valuable insights about things that work and don’t work, says Tremblay. “When you move on to the next goal you’re trying to accomplish, you have an advantage because of the things you’ve learned from your failure,” adds Tremblay.

Start With What You Have

Financial advisers often recommended setting aside three to six months’ worth of income in an emergency fund, which can seem overwhelming if you’re living paycheck to paycheck as many are right now, says Emma Healey, family finance and budgeting expert and founder at Mum’s Money. Rather than giving up on establishing an emergency savings altogether in 2021, simply start smaller.

“Start with what you have. Even if you can only spare $5 a week, stashing it aside to help pad out your budget when times are tough,” says Healey. “It is a decision you’ll never regret. Add more as you can, but the most important thing is to start.”

Automate Your Savings, Debt, and Bill Payments

It’s hard to spend money if you’ve already sent it somewhere else, says Chelsie Moore, CFA and director, wealth management and financial planning for Country Financial. Create automatic debt payments, bill payments and automatic transfers from your checking account to your savings account.

“A little bit adds up over time,” says Moore. “Automatic payments may help you avoid late payment penalties, which are a waste of money, and automatic savings can add up without effort or feelings of sacrifice.”

Meeting your financial goals in the best of times can often be challenging. But when the world is topsy-turvy it can be even more perplexing trying to figure out how to accomplish your goals once you’ve defined them. A personal finance professional can help you navigate the uncertainty and plot a path to success.

“Seek the advice and guidance of a financial professional who has the expertise to assist you,” says Tracey Bissett, CFA and president of Bissett Financial Fitness. “The best way to find one is to seek recommendations from someone you trust and then interview potential advisors to find the best fit. You should feel comfortable talking to the professional and asking them questions.”

Be Kind to Yourself

It’s important to remember as you embark upon 2021, and any year for that matter, that financial fitness is a lifelong journey. “Take small, imperfect actions daily to increase your financial knowledge and movement towards your goals. If you make a misstep, be kind to yourself and get back on track,” says Bissett.

By: Mia Taylor

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Your Financial Year-End Checklist

2020 is over, and for many of you, it can’t end soon enough. There will be plenty of time to celebrate the end of one year and to hope for better days in the one ahead. But before we get to that, take these steps to get financially ready for 2021.

1) Review your goals: The end of the year is a great time to review the goals you made at the beginning of the year and set new ones for 2021. How did you do this year? Is there anything you’re proud of accomplishing? I like to start with bright spots because they can guide you toward success as you set new goals. But let’s be realistic, too; 2020 threw us a lot of curveballs.

Was there anything you wish you could have done better? You can also learn from any potential stumbling blocks and figure out how to use them as stepping-stones next year. You may also want to take time now to review your net worth. That’s one way to gauge the progress you’ve made in your financial health this year.

2) Update your budget: Did you save the money that you wanted to? Pay off the debt that you needed to? The end of the year gives you a solid end point to assess whether met the goals you set at the outset of 2020. What if you didn’t have a budget or financial goals? You’ve got a blank slate ahead. Why not create a budget that works? 

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3) Create a holiday bucket: Holidays can be budget breakers, so why not incorporate them into your spending goals right from the start? Christmas may look a lot different this year. But you can still create a separate bucket for holiday spending and when that money is gone, stop spending. You’ll thank yourself in January when you don’t have an unusually large credit card bill.

4) Use it or lose it: Some of your benefits—like vacation days or a medical or dependent care flexible spending account (FSA)—expire at the end of the year. Take stock of what you have left and use these benefits to your advantage. MORE FOR YOUPPP Loan Forgiveness Application Guidance For The Self-Employed, Freelancers And ContractorsSBA Approving Economic Injury Disaster Loans (EIDLs): What You Need To KnowWhat You Can Do Now To Maximize Paycheck Protection Loan Forgiveness

5) Make any last charitable contributions: December 31st is the last day your charitable contributions can be deducted on your 2020 tax return. If giving to charity is a part of your spending plan, you can use these questions to help make the most of your charitable giving.

6) Pump up your 529: Just like charitable contributions, contributions to your 529 college savings plan must be made by December 31st to count for this tax year. Find out if your state is one of over 30 that allow you to deduct your contribution. You can find the specific deduction here. If your state is one of the four that allow an unlimited deduction, keep in mind the yearly gift-tax and super-funding rules.

7) Max out your 401k: While you have until April to make contributions to your traditional IRA, Roth IRA and HSA, you can only contribute to your 401k through December 31st. So, if you have extra cash and are looking to boost your savings, consider contributing your last couple of checks entirely to your 401k. Business owners can do the same with the employee portion of your Solo 401k contributions.

8) Find your tax return: You’ll be doing your taxes before you know it, so use this time to get prepared. Review last year’s return and make a mental list of records you’ll need to assemble. Year-end is also a good time to decide whether a Roth conversion makes sense for you.

9) Review your business structure: Evaluate your business structure and the QBI deduction to identify any changes you need to make to your business. You might want to set up a solo 401k, for instance, and if so, you’ll have to act before December 31st (although you can make employer/profit sharing contributions up to the business tax filing deadline).

10) Defer income and incur expenses: If you’re a business owner, you may also want to look at ways to defer income into 2021 or pay for business expenses you anticipate for early next year. This is any easy way to reduce your tax liability for 2020. However, remember not to spend money on business expenses that you wouldn’t otherwise incur just for a tax deduction. Spending a $1 to save 24 cents still costs you 76 cents.

 11) Will and trust review: The end of the year is a good time to take stock of changes in your life—like getting married or divorced, having children, starting a business or retiring.  Your estate plan should reflect these changes. Get out your will, documentation for trusts you’ve established and powers of attorney and make sure they match your current situation.

12) Insurance documents: Insurance documents also need to cover your current situation. Take a look at your life and disability insurance policies to make sure they protect your current income and those dependent on it. Your renters or homeowners insurance should cover any additional big purchases you made during the year. And lastly, you should review your health insurance policy for any upcoming changes for 2020. For those of you enrolling in the Market Place, you have until December 15th to pick your plan.

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My last bonus task is to enjoy this holiday season. I love the holidays because you can reflect and appreciate what you have. We’ve been tested a lot this year, living our lives through a pandemic, racial unrest and a contentious election. I hope the end of the year brings you comfort and peace. Follow me on Twitter or LinkedIn. Check out my website

Brian Thompson

Brian Thompson

As both a tax attorney and a CERTIFIED FINANCIAL PLANNER™, I provide comprehensive financial planning to LGBTQ entrepreneurs who run mission-driven businesses. I hold a special place in my heart for small-business owners. I spent a decade defending them against the IRS as a tax attorney and have become one as a financial advisor. It’s a position filled with hope and opportunity. It gives you the most flexibility to create the life that you want. I also understand the added stresses of running a business while being a person of color and a part of the LGBTQ community. You may feel like you don’t have access to the knowledge that others do. I’m here to help lift some of that weight from your shoulders.

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Critics:

A personal budget or home budget is a finance plan that allocates future personal income towards expenses, savings and debt repayment. Past spending and personal debt are considered when creating a personal budget. There are several methods and tools available for creating, using and adjusting a personal budget. For example, jobs are an income source, while bills and rent payments are expenses.

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Huawei Sells Honor Unit ‘To Ensure Its Own Survival,’ But Loses Smartphone Synergy

Huawei, the Chinese telecom giant once ranked as the world’s largest smartphone maker and increasingly squeezed by Washington, announced Tuesday that it would sell its budget handset brand Honor to a government-backed consortium in a bid for the unit’s survival.

Huawei has been struggling to overcome restrictions on crucial chip technologies by the U.S., which calls the company a national security threat. By breaking off, Honor can get smartphone supplies without Washington’s blockade, but will lose access to Huawei’s resources and may even face new U.S. restrictions in the longer term, analysts warn.

“This move has been made by Honor’s industry chain to ensure its own survival,” Huawei said in a statement. “Huawei’s consumer business has been under tremendous pressure as of late. This has been due to a persistent unavailability of technical elements needed for our mobile phone business.”

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Shenzhen Zhixin New Information Technology is set to buy all Honor assets to “help Honor’s channel sellers and suppliers make it through this difficult time,” according to the statement. The buyer comprises more than 30 “agents and dealers” of the Honor brand.

Government-run Shenzhen Smart City Technology Development Group founded the consortium. It counts local government-linked energy, healthcare and investment firms as members. Chinese sports, retail and entertainment conglomerate Suning.com Group, one of China’s largest private companies, is also on the list. MORE FOR YOUVietnamese Mega-Conglomerate Vingroup Launches South China Sea Tourism With New SubmarineTop iPhone Assembler Foxconn Expects To Move Further Away From ChinaVietnam’s Richest Man Sees Interim Earnings Drop 60% As His Conglomerate Retreats From Retail

Shenzhen Smart City Technology Development said in its own statement the investment is “market-driven” one aimed at saving Honor’s “industry chain,” including suppliers, sellers and consumers.

The sale will let Honor “get the ball rolling” on getting supplies, says Kiranjeet Kaur, a Singapore-based senior research manager at IDC’s Asia Pacific client devices group. But it will miss the “synergy” it had established behind the scenes with Huawei, she notes. The two had shared R&D and original design manufacturing. “I’m not sure how easy it’s going to be for Honor to detach from that,” Kaur says. “I’m not sure how Honor is going to differentiate in the market from Huawei.”

The consortium’s state influence could land Honor in trouble if it wants approval from the U.S., Kaur adds.

“The fact that there is no strategic investor behind the deal, but rather a consortium of players, many of which are related to the government, sheds light on some of the deal rationale,” says Alexander Sirakov, an independent Chinese financial technology analyst.

Huawei has hoped that a sale will give it an infusion of cash while protecting Honor itself from more U.S. sanctions, experts said last week when news first broke about a possible sale. Huawei’s billionaire founder and CEO, Ren Zhengfei, had said last year that U.S. sanctions would cause company revenue to drop by billions of dollars.

Last year, the U.S. Department of Commerce added Huawei to an entity list of companies that are barred from doing business with organization in the U.S. An order that took effect two months ago placed 38 Huawei affiliates to the list and restricts transactions where U.S. software or technology would help develop the Chinese company’s hardware.

U.S. President-elect Joe Biden is not expected to cancel action against Huawei at the start of his term next year as he focuses on domestic issues, analysts said last week, but he might not add sanctions.

Huawei’s statement does not disclose a selling price or mention the U.S. sanctions.

Honor was launched in 2013 as a budget brand to compete with Chinese rivals and sold throughout developing markets in Asia at an average price of $156. Honor has kept costs low and saved money by selling most of its phones online. Huawei would ship more than 70 million Honor phones annually. “We hope this new Honor company will embark on a new road of honor with its shareholders, partners, and employees,” the Huawei statement says.

Huawei was ranked No. 2 in the world and No. 1 in China in the third quarter by IDC. It had reached the top spot in the previous quarter for its first time.Follow me on Twitter

Ralph Jennings

Ralph Jennings

As a news reporter I have covered some of everything since 1988, from my alma mater U.C. Berkeley to the Great Hall of the People in Beijing where I followed Communist officials for the Japanese news agency Kyodo. Stationed in Taipei since 2006, I track Taiwanese companies and local economic trends that resonate offshore. At Reuters through 2010, I looked intensely at the island’s awkward relations with China. More recently, I’ve studied high-tech trends in greater China and expanded my overall news coverage to surrounding Asia.

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Chinese tech giant #Huawei has announced it’s selling its budget, youth-oriented smartphone brand Honor to another Chinese company. The move is seen as helping it ride out challenges posed by U.S. sanctions. #5G#China Subscribe to us on YouTube: https://goo.gl/lP12gA Download our APP on Apple Store (iOS): https://itunes.apple.com/us/app/cctvn… Download our APP on Google Play (Android): https://play.google.com/store/apps/de…

8 Numbers That Sum Up The Financial Crisis Facing State And Local Governments

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As the coronavirus crisis continues to force business closures and layoffs across the country, state and local finances are stretched to the limit. The cost of healthcare and public services is soaring as states attempt to contain the virus. Meanwhile, tax revenues are plummeting as jobs disappear and spending slows.

Here are eight numbers that sum up the crisis.

$555 billion

That’s the combined budget shortfall that states are projected to face through 2022, according to the Center on Budget and Policy Priorities.

90%

That’s the percentage of cities that say it will be more difficult to meet the financial needs of their communities in fiscal year 2021 compared to the prior, according to a new report from the National League of Cities.

65%

That’s the portion of cities that delayed capital expenditures or infrastructure projects in June, according to the NLC.

1.2 million

That’s how many local government jobs have been lost since pandemic hit the United States in February, according to data from the Bureau of Labor Statistics.

$100

That’s the weekly payment states were initially asked to contribute to President Trump’s proposed federal unemployment supplement. States immediately balked at the plan, with many refusing to commit or saying their budgets were already stretched too thin. New guidance this week clarified that states won’t have to chip in, after all, to be eligible to pay out a federal $300 benefit through the new program.

$9.9 billion

That’s how much New Jersey can borrow to cover the budget shortfalls created by the coronavirus crisis, according to a New Jersey Supreme Court decision. Hawaii and Illinois have also considered loans to fill budget gaps.

$150 billion

That’s the amount of federal aid the Cares Act, signed into law in March by President Trump, provided for state and local governments.

$1 trillion

That’s how much additional aid Democrats allotted for state and local governments in the Heroes Act, the $3+ trillion aid package they passed in May. Republicans, on the other hand, didn’t include any additional state aid in their proposal. This issue has been a major sticking point in negotiations over the next bill. So far, top Democrats and the Trump Administration have not been able to reach an agreement.

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I’m a breaking news reporter for Forbes focusing on economic policy and capital markets. I completed my master’s degree in business and economic reporting at New York University. Before becoming a journalist, I worked as a paralegal specializing in corporate compliance.

Source: Forbes

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