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We’re now over halfway into 2021, and now that things are opening up we’re all adjusting to life “outside.” You’ve probably seen several funny memes about how “outside is expensive.” I’ll admit, adding restaurants, entertainment, and travel back into my budget has certainly been an adjustment for me. The last year and a half forced us to slow down and reflect on what’s truly important in our lives. Before you jump back into your old habits, here are some quick tips for how to reset your finances.
- Review Your Cash Flow: When was the last time you took a hard look at your spending? Pull the transactions from your checking accounts and credit cards over the last six months and review your expenses in detail. Are you surprised to see where your money went? How much were you able to save? Think about what purchases are important to you or bring you joy. Your priorities may have shifted so you want to align your spending and savings with your goals and values. Be honest with yourself about bad habits you may have developed and what adjustments you need to make to get back on track.
- Set New Goals: Now that you’ve identified your priorities, create a new list of goals for the rest of the year. Be realistic about any upcoming expenses, whether one-time or recurring, and plan accordingly. For example, if you know that you’d like to go on a nice trip or you feel you’ll spend more around the holidays, build these expenses into your budget now so they don’t wreck your plan. Be specific about how much you want to save or how much debt you want to pay off. After you have your big list of goals set smaller, achievable tasks that you can do each week or month to stay on track.
- Track Your Progress: Make sure you have a way to track your goals - what gets measured gets managed. You can use an app, a spreadsheet, or good old-fashioned pen and paper. Either way, schedule time to review your progress on a regular basis. Also, think of those small achievable tasks as a system of good habits. What steps can you take to consistently make better choices and stay on track? Are there potential roadblocks that you need to work around? Developing a foundation of good habits gives you the discipline you need to weather future storms.
In addition to resetting your financial goals, think about ways to improve other areas of your life. Did you fall out of our workout routine? Commit to talking regular walks. Have you disconnected from friends and family? Commit to contacting a loved one each week. Do you feel overwhelmed by all the news and social media? Take regular technology breaks and commit to reading or meditating.
Finally, stay motivated by celebrating the small wins. Take a few minutes each week to reflect on your progress, no matter how small. We all have our bad days, and sometimes we will fail. The ability to think positive and bounce back is what leads to long term success.
It’s never too late to adjust your financial goals so you can finish 2021 stronger than ever. You’ve got this!
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New on the Worth Listening Podcast!
Episode 116: Estate Planning with Guest Shalini Codispoti
Do you feel like you don’t need an estate plan because you’re young, not married, don’t have kids, or aren’t rich? Lauryn and I speak with an estate planning attorney about the documents everyone should have in place. We also discuss estate planning for unmarried couples, prenuptial agreements, trusts, and considerations for real estate investors. Check out the episode here.
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Episode 117: College and Student Loan Planning with Guest Nannette Kamien
On this episode, I interview Lauryn and a fellow financial planner about what parents and students need to know about planning for college and repaying student loans. We discuss types of college savings accounts, types of student loans, various strategies, and common mistakes we see. Check out the episode here.
You can also listen to the Worth Listening Podcast on Apple Podcasts, Google Play, and Stitcher.
Need help prioritizing your financial goals? Let's chat!
Cheers,
Chloé A. Moore, CFP®
Founder, Financial Staples
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