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6 Financial Goals To Set For 2021
January 1, 2020●
4 minute read●
Let’s chat about financial goals, and the ones you should be making for 2021. The key to setting goals is to make a habit of them. Spend time every year to determine what you want to achieve in the coming year. Here are some clear financial goals to set for 2021.
Update, October 2020: Many of us had our financial goals derailed as a result of the coronavirus pandemic. If you are in this situation, you can find out more and see what options are available to you by visiting the Australian Government’s website.
1. Set A Budget
Setting budgets is often the easy part; it’s sticking to them that’s tricky.
Budgeting is the key to getting control of your finances. A budget is your map; it’s your financial accountability and responsibility. I know it doesn’t sound fun (we’ll be honest, in reality, it probably isn’t) but setting yourself a budget allows you to exercise discipline. Do you know how much money you’re going to put into necessities versus how much you’re going to put into savings? How much of your income can go to personal or luxury expenses? It’s going to be very difficult to build wealth long term if you don’t know.
By managing your money and having a plan, you can control how and when you’re able to reach your financial goals.
2. Make A Savings Goal For Yourself
Your savings goal should be attainable, but it should also be as aggressive as you can manage. It’s advisable to put away 10% of every paycheck immediately. Then, think about how to live on the remainder and adjust your budget accordingly. Remember, the more you save now, the more the money will multiply and compound in the market with time. It’s a good idea to put away your savings money first before you pay anything else. If your savings are the first part of your budget that you pay, they’ll be much less likely to get left out. Just pay yourself first, then make a budget with what’s left.
3. Pay Off Bad Debts
Not all debts are necessarily ‘bad’. Bad debts are a particular kind of debt. They’re debts carrying a very high-interest rate, anywhere typically from 15% to 18% interest and over. These are typically found on your credit cards.
There is also good debt. This is the kind of debt you incur when you’re investing in something where that asset that is likely to produce a great return. For example, if you were to borrow money to put into a house, that might be considered good debt. Also, investing in a college education, investing in high school education is likely to be considered good debt.
If you find yourself in a position where you’re paying off multiple ‘bad debts’ you may want to consider a consolidation loan. These type of loans are used to condense several smaller payments into a larger single one. The idea is to make managing your repayments easier and, ideally, cheaper.
4. Get Your Credit In Check
Start the year off right by getting a handle on what your credit score is and the factors that affect it. If your credit score ends up being lower than you’d like, then take some steps to improve it. Pay off debt and keep the balance low on your credit cards as a step to improve your credit score.
It’s also important to avoid things that will harm your credit score. Applying for multiple credit cards or loans in a short period of time can quickly harm your score. Likewise, repeatedly missing repayments can do damage to your score.
5. Get Your Taxes Done Early
Tax season always seems to come around quicker than you think. Each year, far too many of us make the mistake of waiting until the last minute to get our taxes organised. Avoid the stress and hassle this year and set a goal to complete them sooner rather than later. Get ahead of the game and, come the end of October, you’ll save yourself a headache.
6. Start Investing
A lot of people are scared of the stock market, but you don’t have to be day trading or have an intimate knowledge of the ASX to benefit from smart investments. Use a resource like The Motley Fool to read up on investing advice. You could even start with micro-investing; small recurring payments that don’t break the bank but can add up big over time. There are even smartphone Apps like Raiz or Spaceship that allow you to quickly and easily invest your spare change. Just be aware, while certain investments are considered ‘safe’, no investment is ever risk-free.
Do You Need Cash Now?
Setting financial goals is fantastic, but what if you need funds in your account, like, right now? Jacaranda Finance offers loans of $300 to $10,000 online. You could even have an outcome on your loan application in 60 minutes*!
We’re committed to giving all Aussies a fair go. Even if your credit score is less than stellar, we may be able to consider you for a loan.
To see what your weekly, fortnightly, or monthly repayments are, scroll up and use our handy online calculator.
Or for more finance tips like this, visit our blog here.
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Written by Jacaranda Team