Looking back on 2020 and the pandemic, what would you like to reset? Maybe it’s more quality time with loved ones, a better work-life balance, healthier eating habits, more sleep, or using your money wisely. 2020 taught us lessons about how to work, maintain relationships, and experience personal growth during a pandemic. The coronavirus forced everyone to change their behaviors, especially with money. So why not make 2021 the year to reset your life and your finances? Here are 5 ways you can do just that:
1. Set New Goals that Reflect Your Values.
Surviving a difficult time shifts your outlook on life, especially goals and priorities. Take the time to reevaluate your goals and make them SMART (Specific, Measurable, Attainable, Relevant, Time-bound). Ask yourself questions like, “How have my priorities shifted during the pandemic?” and “Were there any goals I put on the backburner? Can I give them a new life in 2021?” Now is the time to reassess what’s most important to you and organize your life around those elements.
2. Adjust Your Finances for Life Changes.
The pandemic taught us that change is inevitable. If your life has changed in significant ways, take time to adjust your finances to align with your real life. Make 2021 the year of alignment, where your money truly represents your life.
3. Build Up Your Emergency Fund and Adapt Your Savings Plan.
Did you have to dip into your emergency fund to cover unexpected 2020 expenses? If so, don’t worry, that’s what the fund was there for. But it’s important to build the fund back up again. Also, reevaluate your savings strategy given the turbulence of 2020.
4. Take Another Look at Your Cash Flow.
Balancing money coming in and going out is key. It’s a great time to check your spending habits, ditch any negative spending habits, bring intention to your spending, and prioritize your savings.
5. Zero-In on Your Investments.
Even during tumultuous times, it’s important to focus on your investment plan. Reevaluate your risk tolerance and capacity, time horizon, and goals, as well as any big life transitions. If you can afford to remain invested, it’s usually best that you do.
Ready to take your finances to the next level in 2021? Work with a financial advisor to help transform your financial resources to support the things that matter most to you. Your money has purpose and meaning when you align it with your goals and values. Set up a time to talk with us today!
