As the first month of 2021 comes to an end, so do a lot of 2021 new year's resolutions. It's okay if that includes some of your resolutions too - there are still 11 months left of 2021! This is a great time to check in on your 2021 resolutions. As you reflect and reevaluate, here are a few tips to help you meet your financial resolutions for 2021!
Start a Budget Journal
Often times, creating a budget isn't the problem. The problem is sticking to the budget. One way to address this issue is budgeting journaling. In a budget journal, plan your finances for every month ahead of time. Break down your income and expenses and get straight to dividing money between accounts or investments as soon as your salary is credited. This will help you measure your budget and see if you designed a budget that you can actually stick to, and help you get back on track in the instances you overspend. Your budget journal can be in a physical journal, on a digital note-taking device, or an excel sheet - whatever works for you. Tracking is key!
Stick to Cash or Debit Cards
When using credit cards, we often end up spending more than we planned. If this something you experience a lot, try using cash and debit cards more often so you can spend only as much money as you have set aside for a certain expense.
Save at the Start of the Month
A common misconception that exists about saving money is that it is ideal to save at the end of the month after all your expenses have been paid. Nothing could be further from the truth. Saving at the beginning of the month can save you last-minute thriftiness to scrape up something to stay in your savings account as the month draws to a close. Save a percentage of your income and plan your budget excluding that money so that you always know how much you are supposed to spend on everything.
Come Up With a Formula
The next big challenge is deciding how much money you should be spending and how much you should be saving every month. Devise a formula that you can stick with. If you cannot save 50% of your income, do not be overambitious. You will most likely find it difficult to meet the expectation after the first few months and relapse to not saving anything at all. We do not want this as little savings is always better than no savings. Start with saving 10% or 20% of your salary and make progress as you go along.
We hope you found these tips helpful and easy to incorporate into your financial resolutions! If you have any more ideas about what could be a good resolution to come up with for your financial management in 2021, do let us know.