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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Five Ways To Buy Something You Can’t Afford

“If you can’t pay for it in cash, you can’t afford it.” “If you can’t buy it twice, you can’t afford it.” You’ve probably heard one of those aphorisms. The point is that even if you’re paying with a credit card (for the convenience or the cash back or travel rewards), if you can’t cover the cost of something with available cash, you can’t afford it and shouldn’t buy it.

While that is generally true, it’s not always practical advice when you, or someone you love, really needs something that neither your paycheck nor savings can cover. It’s also not realistic, since most Americans spend money on things they don’t need.

But you didn’t click on this article for a debate on whether Americans spend too much.

Today In: Money

Nope. You want to know HOW to pay for something you can’t afford to pay for in cash now.

I’ll cover five options: old-fashioned layaway; newfangled point-of-sale financing; credit cards; saving for what you want to buy; and selling stuff you already own, but don’t want as much as what you plan to buy.

1. Old-fashioned Layaway

Growing up, I only heard about layaway during the holiday season when major department stores advertised their Christmas layaway programs. Now, the fintech community has transformed this option, as I’ll discuss next.

But first, it turns out the traditional Christmas layaway is alive and well at Walmart, the world’s largest retailer by sales. And now is the time to get started. Layaway works like this at Walmart: You go to a store, collect your intended gifts,  go to a special Layaway counter, put down a deposit of at least $20 or 20% (whichever is more), and make additional payments whenever you’re in the store.

Walmart requires all items be paid off and picked up by December 10, 15 days before Christmas. There’s no interest charged. If you decide you don’t want a purchase after all, you can get a refund, usually minus a cancelation fee. That fee can be steep: 20% of the purchase price or $20, whichever is greater. (But Maryland, Ohio, Rhode Island and Washington, D.C., don’t allow a cancellation fee, while Alabama caps it at $25 and North Carolina at $50.)

If you’re shopping for a major appliance, Sears offers a layaway program year-round online and in its stores. The plan includes a $10 or $20 service fee and a set payment term of 8 to 12 weeks. If you want to cancel a Sears layaway contract, you have to go to the store to do it.

2.  Newfangled Point-of-Sale Financing

The basic principle of old-fashioned layaway is that you don’t get the item until you have finished paying for it. If your refrigerator or washing machine is broken beyond repair, you don’t want to wait 8 or 12 weeks for a new one.

With newfangled point-of-sale financing (it’s primarily available online, but sometimes in stores, too), you get the item now and pay over time. Essentially, you’re taking out an instant personal short-term loan that is tied to the purchase of a specific item or service.

QuadPay, Klarna and Sezzle allow you to pay for an item in four interest-free payments. Forbes Fintech 50 member Affirm offers interest-free financing from a small number of retailers that subsidize financing (among them Peloton, Warby Parker and Casper), but generally charges interest rates ranging from 10% to 30% (based on your credit score) for other purchases. Affirm’s longest loan term is 48 months.

Often, these fintech financing offers only become apparent when you go to check out a purchase online. But you can also plan ahead. For example, Affirm offers a list of merchants who offer its service in each category. Plus, it allows you to find out in advance how large a purchase it will finance for you. Affirm gives you this number, it says, without making a “hard inquiry” on your credit record, meaning it won’t affect your credit score, the way applying for a new credit card likely would.

When you buy something financed by Affirm, however, both your loan and your payments are reported to the credit bureaus, meaning timely payments can help your credit score and late payments will hurt it.

Separately, while Amazon’s credit cards may be better known, the behemoth of online selling also offers its own point-of-sale installment payment plans on certain (usually higher-dollar) purchases.

Read more:  Fintech’s Version of Layaway Explodes Online

3. Credit Cards

Like point-of-sale apps, credit cards allow you to get an item upfront while you pay the costs over time. “When you swipe a credit card, you are taking out a loan,” warns Tiffany “The Budgetnista” Aliche, a budgeting expert and financial wellness advocate. But unlike point-of-sale financing, it’s not a one-time loan with a set payoff date. The lure and danger of credit cards is that they provide so-called “revolving” lines of credit that you can use as long as you keep the account open and in good standing.

The credit card company doesn’t care what you’re buying with the credit line. (By contrast, companies like Affirm use algorithms that actually take the item you’re purchasing into account when deciding whether to green-light a loan.)

Before reviewing ways to use your credit card, here’s a bit of basic, yet very important, information on credit cards. Most credit cards are unsecured, meaning that if you don’t pay the lender back for the purchases you made, then they can’t take possession of those things. Lenders will likely send you notices requesting payment. If that doesn’t work, they will send your account to collections and report your delinquent account to the credit bureaus, hurting your credit score and ability to do things like get a mortgage or rent an apartment.

Some banks and credit card issuers offer secured credit cards, which are credit cards that require a deposit in order to use them. These are great for building credit and improving your credit. But they do not work if you do not have enough cash to cover the deposit amount.

So back to unsecured credit cards. Your credit line comes at a price known as the annual percentage rate (also called the purchase rate) and it’s based on your credit history. Individuals with good or excellent credit can borrow at lower APRs than individuals with bad credit.

Read more: The Forbes Guide To Credit Cards

But sometimes–often when you take out a new credit card and sometimes when you receive a special offer from an existing one–there’s a promotional period that allows you to buy something and take months to repay, without owing any interest.

If you’re in a rush to buy that new washing machine, you might be able to buy it with a credit card you already have and then apply for a new card with an attractive balance transfer offer.  Typically, there may be a fee for this transfer. But not always.

For example, the Chase Slate credit card is currently offering new customers a 15-month 0% interest rate for new purchases and balance transfers. Plus, there’s no fee for balance transfers during the first 60 days after you open the card. Be careful: If you don’t pay off your balance within those 15 months, you’ll be stuck paying an interest rate of between 16.99% and 25.74%.

Read more: How To Make A Balance Transfer Card Work For You

The 10 Best Best Balance Transfer Credit Cards

Credit cards are an option for buying something you can’t afford to pay for with cash—but an option that should be approached with extreme care. It’s easy to let a credit card balance sneak up on you (just ask this Millennial who accumulated  more than $30,000 in credit card debt) particularly if you carry the card around and begin to use if for everyday expenses, as opposed to the one-time purchase of an expensive item (e.g. the washing machine) you need now.

Read more:  The Best Way To Pay Off A Credit Card Debt 

4. Save Your Coins

In the wise words of rapper Wiz Khalifa, “Surround yourself with people who help you save money, not spend it.” It’s not clear in what ways Khalifa and his friends save a few hundred dollars, but there are plenty of ways you can save money toward a goal.

The most basic and traditional way is to open a savings account. You can even incorporate your friends in this process: ask them if they’d like to refer you to their bank for any referral bonuses for the both of you. For example, if a TD Bank customer refers a friend who opens an account,  each gets a $50 bonus.

Of course a $50 bonus shouldn’t lead you to open a savings account with a noncompetitive rate. With the growth of high-yield online savings accounts, it’s easier than ever to find an account with a good interest rate.

You’ve found a high rate. Now, get a plan to save for that big purchase you can’t finance from current cash flow. Let’s say you have a friend’s out-of-town wedding next year. Calculate the costs of travel, the outfit you’ll need, the wedding gift and anything else that factors into it. Then divide the total expense by the number of months or weeks you have until the date you need to be ready to purchase those things.

Once you’ve figured out how much to set aside into that savings account every month or every week, consider setting up automatic transfers from a checking account to a savings account so you don’t have to think about it. (And if your bank doesn’t offer that kind of service, consider finding a new one.)

More reading: Three Good Reasons To Switch Banks And How To Do It

Another behavioral suggestion to reinforce your savings comes from Aliche, who observes that “inconvenient money gets saved.” She suggests making your savings account difficult to withdraw money from. In other words, it’s harder to save money when it’s easy to transfer money back into your checking account for happy hour or an impromptu shopping spree.

“I had to make my money inconvenient so I opened up an online-only bank account. I just put my savings there–not checking, no debit card, just savings. It is impossible for impulse buys,” Aliche says. Banks usually take a day or more to transfer your money to other banks. Within that 24- to 36-hour period the impulse to buy something might pass.

Another behavioral trick to boost your savings: roundup options. A roundup is a feature wherein you accumulate more savings by automatically transferring over loose change to your savings account. Some banks like Bank of America have this feature. If your bank doesn’t have this, then consider a roundup app like Acorns, Qapital, Digit or Chime. These apps work with third parties, meaning a partner bank that you provide personal identifying information to. (They do this so they can offer FDIC insurance on your savings, since they’re not banks themselves.)

5. Sell Stuff

Way back when, if you needed to raise cash from your stuff, you had to go to the pawnshop or stage a garage sale. Both might be seen as signs of financial distress. Now, however, there are more ways than ever to sell surplus items online and living with fewer material things can be seen as a savvy lifestyle choice.

More reading: The Joys Of the Minimalist Life In Retirement

How Decluttering Her Home Changed This Young Mother’s Entire Life

Since the heyday of eBay, there’s been a surge of platforms for neighbors and strangers to sell stuff to one another. Some platforms allow you to sell for a set price, while others allow users to bid on your items. Sites like LetGo, Craigslist, Ruby Lane and Facebook Marketplace allow you to unload unwanted furniture and decorative knickknacks. When it comes to your wardrobe, top options include PoshMark, thredUP, The Real Real, Kidizen and Tradesy.

More reading: Life After Forever 21. How To Reduce Your Personal Cost Per Wear

Once you’ve gathered intel on your salable items,  decide how you’ll sell them. Would you prefer to sell them yourself on sites like Poshmark and Craigslist or sell through an online consignment shop like The Real Real?

Before snapping Instagram-worthy pics of your things, there are a few things you should do to prepare. First, edit what you’re going to sell. Things in good condition and better do well on these platforms. Anything less than good condition should be recycled or trashed.

Second, research the price range of your item. The item likely will not go for what it originally cost, especially after you’ve used it—unless it’s a limited edition collectible.

Aliche’s sister picked up a Hermès scarf for $2 at a thrift store. (The old-fashioned kind.) While she had been shopping for a scarf to tie around her head at night, she decided to take this scarf to an Hermès in Short Hills, New Jersey, and get it authenticated. It turned out to be a limited-edition design worth upwards of $1,000. She sold it on Poshmark.

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Asia is a personal finance writer for the Money and Markets team at Forbes. She’s based in New Jersey. Before joining Forbes, she reported for Financial Advisor magazine and also wrote for The Cranford Chronicle, NJ.Com and ThePopBreak.com. She also spent two years teaching English as another language in Shenzhen, Guangdong, China.

Source: Five Ways To Buy Something You Can’t Afford

508K subscribers
Investing 101 FREE ebook: http://theminoritymindset.com/get-ric… SUBSCRIBE for the latest videos *NEW VIDEOS EVERY WEEK* SC @M2JaspreetSingh http://www.TheMinorityMindset.com Instagram: http://www.Instagram.com/MinorityMindset Facebook: http://www.Facebook.com/MinorityMindset What Can You Afford? Budgeting For Wealth | Minority Mindset – Jaspreet Singh What’s up everybody my name is Jaspreet singh & welcome to the Minority Mindset’s Finance Friday. What’s affordable mean? If you got $200 in your bank account can you afford a $200 pair of shoes? It depends who you ask If you haven’t watched my previous video on budgeting, you should watch it so you know how to allocate your money once you start making it. But now you have some money in your bank account what do you do? If you want to buy luxury things, meaning things that you don’t need, Yo Jaspreet I need these new $200 shoes No remember my rule of 5. If you can’t buy 5 of them, you can’t afford one of them. If you want to buy a $100 pair of shoes and you don’t have $500 saved up, you can’t afford it. What’s the point of doing this? It forces you to live below your means. It forces you to save for something bigger, something to invest it, something that will make you more money. Make the sacrifice now so you can live bigger tomorrow. And listen, just because a sales person says you qualify for something more expensive doesn’t mean you can afford it. I briefly was a real estate sales agent for people who wanted to buy and sell their homes. We were paid based on the value of the home, the more the home costs the more we get paid. The same worked with banks, bank loan officers are often paid based on the value of the loan. Now although the bank officer and the real estate agent have to look out for your best interest, they aren’t doing anything illegal by approving you for the highest amount possible. So it’s in the bank officers best interest to get you the biggest loan as possible so they get the biggest paycheck. And it is in the real estate salesperson’s best interest to sell you the most expensive home so they get a big check. These people don’t have to deal with the consequences If you end up buying something that’s a little too expensive for you. You have to be the one in charge and know what your budget is. Don’t rely on sales people because their interest isn’t always the same as yours. And its not just houses and mortgages. Payment plans are becoming more popular for everyday items. Appliances, furniture, electronics, even our cell phones. I’ve said this before but it is nearly impossible to build wealth when you are constantly making payments to pay off things that you can’t afford. This year, Forbes reported that 63% of Americans, 63% don’t have enough funds saved up to cover a $500 emergency. Don’t be the majority. Put in the work and the sacrifice now so you can live better tomorrow. If your goal is to build wealth, you have to start living below your means. If you can’t buy 5 of them, you can’t afford one them. I know it’s hard, but you will set yourself up to stand out from the majority. #ThinkMinority #MIH #Budgeting http://www.TheMinorityMindset.com This Video: https://youtu.be/HRRrBrF7jRA Channel: https://www.youtube.com/c/MinorityMin… Based in Detroit. Jaspreet Singh

When Smart Personal Finance Habits Just Become Stupid

When you start getting your finances in order, it’s exciting. You see the basic concepts and rules of personal finance in action, and, after a while, they start to pay off. This makes it easy to become a personal finance devotee. But even the best financial advice can become counterproductive……..

Source: When Smart Personal Finance Habits Just Become Stupid

Everything I’ve Learned About Personal Finance in 10 Sentences

We’ve featured a lot of tips from The Simple Dollar’s Trent Hamm—from buying in bulkand earning money online to managing a career hiatusand overcoming decision fatigue. Here, he shares his ten most important pieces of financial advice……..

Source: Everything I’ve Learned About Personal Finance in 10 Sentences

The Best Employee Benefit That You Are Likely Not Getting – Megan Gorman

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Like many parents, Alisa Metcalf was focused on making sure her son Charlie was prepared for the college process. She started saving when her son was young and felt that she was on track.  But as the years went on, despite doing all the right things, she didn’t feel completely prepared. “The application process can still be very daunting,” she says. “There is so much more to this process than how to pay for school.” Luckily for Metcalf, her employer, DaVita, an international provider of kidney care services, had already thought about how to help her through the college process with her son…….

Read more: https://www.forbes.com/sites/megangorman/2018/10/30/the-best-employee-benefit-that-you-are-likely-not-getting/#4817d9c47375

 

 

 

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