Monday, January 18, 2021

MONEY MOVES I'M MAKING IN 2021

H A P P Y  N E W  Y E A R! Is everyone excited to dive into a fresh start? It's now 2021 which means NEW YEAR, NEW MONEY. My resolutions and goals each year always revolve around improving my money game and overall financial situation. Saving, investing + managing money is crucial to living the life you want now and in the future. While I'm not an expert or financial advisor, I love researching and learning from others. I think adding a money section to the blog can create some great conversations + I would love to learn from you all as well. Feel free to comment below what money moves you're making in 2021 + your best money advice. 

PS-- it's easy (& normal) to feel overwhelmed by what we are, aren't, should or could be doing. When it comes to $$$, it's never too late to start or to keep improving. Progress over perfection! 

MONEY MOVES I'M MAKING IN 2021

1. MAX OUT ROTH IRA CONTRIBUTIONS - I've been very fortunate over the past several years to be in a position to max out the yearly contribution limits for my Roth IRA retirement account. Being in my mid-20s, I have very low expenses which have allowed me to throw a lot of savings into my Roth. My plan is to max out the $6,000 contribution limit for 2020 by the deadline (April 15th) and begin contributions for the 2021 year after that ($6,000 limit due by April 2022).

**If you don't currently have a Roth IRA or some form of retirement account, I would HIGHLY encourage you to do some research + open one. You don't have to have a lot of $$$ to start one + every dollar invested now will pay off in the future.** 

2. INCREASE EMERGENCY FUND - I've been actively setting aside money into a savings account for years. I've always viewed it as money you leave alone for a rainy day without much thought or any goal amount of how much I wanted to save. Something I learned last year is the importance of being intentional with your money and having a plan for every dollar. I decided that long term, I would like to have a year's worth of living expenses saved in a designated "emergency fund." Because I have a healthy savings now, rushing to complete this goal isn't my top priority. I am more focused on investing and growing my money right now over saving. I've decided to keep some of my savings in this "emergency fund" and continue adding to it monthly. My goal is to save another year's worth of expenses this year.

**Most financial experts recommend starting with a $1,000 emergency fund + then growing it to 3-6 months worth of living expenses. Even if you can only save a few dollars a month, do it! Every bit helps!** 

3. FOLLOW A BUDGET - For years, I HATED the idea of budgeting. I always viewed it as being kept on a leash which was not for me. "If I want to buy something, I should be able to buy it" was my mentality. I've always been responsible with money so I didn't really see the point. After following several budget/finance gurus, I started to see the importance of being intentional with your money and knowing where it's going. In 2020, I began tracking my spending to see how much of my income I was spending/saving/etc. I then started to create a rough goal amount of how much I wanted to spend on things like food, etc. for the month. I was never super restrictive with this, however it did make me aware of how much I was spending throughout the month which I think helped me spend less and be more intentional. 

**I use the free version of the Every Dollar budgeting app by Dave Ramsey/Ramsey Solutions. You can input your income + budget for expenses each month. I like that I can easily log purchases on the go + see them all in one place!**

I then decided that I needed to order The Budget Mom's Budget By Paycheck Workbook. After watching The Budget Mom on YouTube and Instagram, I thought that tracking and budgeting in her workbook looked like fun. I even ordered these highlighters to use with the book. Who am I now??? Lol! On a serious note, I liked the idea of being able to write everything down in a book and look back on my progress for an entire year. I've started using it this month so we'll see how things go! I'll keep you posted. 

4. NON-RETIREMENT INVESTMENTS - This is a little bit of unchartered territory for me. One of my goals the past few months is to begin investing outside of just my retirement fund. While I'm young with low financial obligations, I feel it's important that I use my money to my advantage. How much I want to invest, what I want to invest in + capital gains/taxes are all things I'm working to figure out.

5. HIGH-YIELD SAVINGS - I would like to transfer my savings account over to a High-Yield Savings Account with a higher interest rate. Essentially this lets you earn a little bit more interest on your savings balance to help combat inflation, etc. I planned on doing this in 2020, however there have been dramatic drops in interest rates. Most went from 1.5%-2% down to around 0.5%-0.6%. These are still higher than my bank savings generates, however right now the ease of convenience and familiarity I have with my bank seems more valuable to me than moving everything for the interest rate. 

That is the main bulk of my financial goals + money moves for 2021. Every year I try to take a few steps to improve and increase my situation. If you're just starting a financial journey or you haven't started yet, starting small is better than not starting at all. I know it can seem stressful or overwhelming but I wanted to share my goals in hopes of inspiring you to save + better your own financial situation. 

What money moves are you making this year?


xx,


Kristen