Don’t give up on your financial resolutions for 2021!

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The ancient Babylonians are said to have been the first people to make New Year's resolutions, some 4,000 years ago. They were also the first to hold recorded celebrations in honour of the new year but for them the year began not in January but in mid-March when the crops were planted. A new year often means a fresh start for many of us, so we feel pressured to make resolutions that often get forgotten after a couple of weeks.

For many of us, we usually begin eating chocolate again, skipping the daily runs and falling back into old habits. This is also the case with the financial goals we have set ourselves for the year. However, after the unpredictable year of 2020, it is now more important than ever to stick to your financial goals and make sure you and your family are financially secure.

Here are some ways that may help you stick to your financial resolutions this year:

Get your finances out of your head and note them down

If you are serious about budgeting for 2021, you need to start by creating a plan. The easiest way to do this is by creating a simple spreadsheet. You should begin by noting down all the money that you receive, such as your salary, allowances, and any other income. Then all your essential outgoings such as your mortgage, utility bills, food shopping and travel costs. Don’t forget your non-essential spendings such as shopping, takeaways, and entertainment. Once you know what is coming in and going out, you can begin to address improvement areas - this process can be eye-opening but is an important step in looking to improve your finances.

​​​​​​​Be realistic

It is very easy to fall out of the habit of putting money aside each month - the car might need repairing, or the boiler might break. If you are determined to save more in 2021, you should look into how much you can realistically save each month. Treat these savings as another bill, set up a standing order so once you get paid, money is sent to your savings account automatically. Do not overstretch yourself; it is pointless if you put too much money into your savings and have to end up moving it back; only save as much as you can.

Try not to overspend

Everyone does it. We spend too much on essentials when there could be a better deal out there, we buy the luxury items we do not need, and we may even be set in our ways when it comes to spending. Now is the time for you to sit down and evaluate where the money is potentially being spent unwisely. Are you paying for unnecessary subscriptions or spending too much on your weekly food shop? These are the questions you should be asking yourself: you need to take time to look for better deals and you could save a lot by switching providers.

The above suggestions are some basic self-help steps you can take to optimise your finances in 2021. However, if you think these steps may be complicated, time-consuming, or confusing, or you have already attempted 'all of the above' and still cannot see the wood for the trees, we can help! LIFT-Financial has Chartered Financial Planners who can help you create a financial plan that is adaptable and clear and allows you to reach your financial resolutions; not only for 2021 but with one eye on the future. Please get in touch if you would like to discuss your financial goals for 2021.

Dan Cockayne – Latest Blog Posts

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