7 Financial Resolutions for 2021

With a new year comes new year’s resolutions. Taking control of your finances is an excellent place to start, so we’ve put together 7 financial resolutions for 2021 that will help you work towards your most prosperous and positive year to date.

1. Increase your savings

Saving money helps you plan for the future, prepare for unexpected outgoings and work towards your life goals.

Aim to increase your savings by 25% starting this month. If you’re not a saver yet, transfer £25 a month into a separate savings account the day you get paid and avoid the temptation to dip into it later in the month.

If you’re already a regular saver, up your savings by 25%. It may seem like a small increase, but it will add up over the year and put you in a fantastic position by the end of 2021.

2. Add to your pension pot

Take your future planning a step further in 2021 by increasing your pension contribution by at least 1%.

By getting into the habit of adding more to your pot every year, you’ll compound your reserves and work towards a comfortable and worry-free retirement.

Adding as much to your pension as you can stands you in good stead for the future and enables you to benefit from more interest over the years as your nest egg accumulates.

If you’re unsure about how to start or add to your pension, speak to your employer about how they can match your contributions or arrange a chat with a financial advisor to help you understand how to move forward.

Remember, it’s never too early to start planning for your retirement. The earlier, the better! So, don’t put it off and vow to establish good habits now.

3. Drop a direct debit

Let’s face it: we all have one or two unnecessary direct debits exiting our account every month. Gym memberships, streaming services, meal boxes and more: ask yourself if you genuinely get maximum value from each of your monthly outgoings. If not, try living without them and see if you miss them.

Even the smallest monthly outgoings add up, so resolving to cut back on at least one direct debit will improve your financial status this year.

After all, you can always switch it back on if you really can’t live without it – so you don’t lose anything by cutting back a little and trying new things. If you need extra motivation, why not pair it up with another resolution, like quitting the gym membership to start a new outdoor running regime? Or, pledge to ditch Netflix to read more books?

4. Donate to charity

Good financial resolutions aren’t always about saving money. In fact, resolving to dedicate money to a worthy cause is a brilliant way to spread positivity in 2021.

Charities suffered hugely during 2020: the pandemic caused many event cancellations which prevented funds from coming in. So, why not set up a monthly direct debit to a charitable cause that means something to you?

Many charities run monthly raffles or lotteries you can join, while others provide suggested donations with information on what your contribution can do to help those in need.

If money is too tight to commit to regular charity donations, set yourself a goal to raise funds for great causes in other ways. For example, sign up for charity races or challenges, ask for sponsorship from friends and family, or donate your time to volunteer with a local charity.

Whichever option you choose, supporting charities close to your heart is one financial resolution that will make a meaningful difference in 2021.

Remember too, if you are a higher rate tax payer you can claim tax relief on your contributions.

5. Keep cash in your wallet

Draw out £50 in cash and keep it in your wallet or pocket. For many people, this creates a feeling of financial freedom and helps them to stop worrying about money because they know it’s there if they need it.

Other people like to draw out a set amount of cash for their monthly spending money, which can be a great way to stick to a budget in 2021. The ease of contactless payments can mean we spend more than we intend to, whereas having the physical cash in your wallet can make you more aware of your spending and less likely to splash out.

6. Take control of your debts

If you have debts clouding your financial wellness, make 2021 the year you take control and pay off your credit cards, overdrafts and loans.

Make a realistic plan to tackle one balance at a time and pay off the most expensive debts first. Prioritise debts over savings and explore your options for managing and removing debt from your life.

Speaking to a financial expert can alleviate much of the stress you may be experiencing if you’re struggling with debts. Therefore, don’t be afraid to open up and access support if you need it. There are always options out there. So, if debt is an issue in your life, work towards changing this for the better.

7. Create a vision board

Setting goals is a fantastic way to stick to your financial resolutions for 2021 and stay motivated.

Creating a vision board will allow you to set out how you want your finances to look by the end of the year, then work backwards to establish what you need to do each month to achieve your goals.

Set a clear goal (or goals!) for 1st December 2021, then revisit this each month to review your progress and ensure you stay on track.

Of course, it has to be realistic to you and your situation, so make it personal, serious and fun, too. Whether your goal is to clear your credit card or finally buy that new car or designer bag, include it all on your vision board and check in regularly to remind yourself why sticking to your resolutions matters.

Hopefully, by the time December 2021 rolls around, you can relax and enjoy it, knowing you’ve worked hard to hit all of your goals.

Access financial support

Naturally, many of us aren’t sure where to begin when it comes to setting financial resolutions or sticking to a clear plan.

The good news is, you’re not alone, and there’s plenty of help out there to support you to navigate the financial landscape.

Financial Affairs is a family-run company providing expert advice and support to individuals and businesses. Specialising in insurance and financial planning, we work with you to help you achieve complete financial wellbeing.

Book a free virtual financial wellness consultation to see how we can help you manage your finances more effectively in 2021. Call us on 01282 452255 or email hello@financialaffairs.co.uk.

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