2020 Is (Finally) Coming to a Close. Here Are 7 Financial Moves to Make 2021 Less Stressful
2020 has been quite the year, to say the least. With only one month left, everyone is ready to put the year behind us and try to start fresh. From the coronavirus pandemic to economic shut downs, many have felt the financial strain. If you are looking to start 2021 off on a better financial note, these seven moves will (hopefully) help make your year less stressful.
Financial Move #1: Spend Smartly
Make your 2021 mantra an easy one: spend less, reduce stress. Before you buy, ask yourself "will this actually improve the quality of my life?". If the answer is no, or even maybe then skip the purchase.
You can start small, by doing things such as:
- Delete that Amazon App off your phone
- Do Not click on Instagram Ads
- Cook at home rather than going out to dinner
- Shop your car insurance at new providers
- Limit impulse spending by putting a holding period on all purchases
- Check Facebook Marketplace or Cragslist before buying retail, this is better for your wallet and the environment
The above things can become a lifestyle change and something that you can implement into your everyday life.
Financial Move #2: Reduce Debt
Getting rid of, or at least reducing, your credit card debt can relieve an immense amount of financial stress. Start by paying off the credit cards that have the highest interest rate before working your way down the line to lower-interest loans. Making small changes can start becoming more of a lifestyle, therefore making it easier to reduce your debt.
Financial Move #3: Track Expenses
If you track exactly where your money is going, it will give you a greater idea of where your overall financial picture stands. Simply understanding where your money is going can help you to really own it, which in turn, can start to reduce financial stress. Ohana Wealth and Life has an incredibly easy and effective budgeting and aggregation tool, eMoney Advisor, that you can use free of charge and obligation.
Financial Move #4: Create an Emergency Fund
It can be difficult to comprehend creating an emergency fund when you are already financially stressed. But whenever you can, put any extra money aside at the end of the month into an emergency fund for unexpected expenses, such as house repairs, car repairs or healthcare costs.
Financial Move #5: Start a Spending Plan
Once you’ve worked diligently to reduce debt and build an emergency fund, start a spending plan. When you do this, you’ll need to track your income while making a plan for all that you are earning. You can prioritize your spending once you have allocated the funds to cover expenses. This should hopefully help you breathe a little easier as you spend money while staying on track.
Financial Move #6: Trade “Stuff” for Experiences
While you are still spending money, research shows that people enjoy experiences more than possessions, so this is a great way to make better use of our money. Rather than buying a new outfit, you could spend your money on:
- Cooking classes
- Traveling (when safe to do so)
- Art classes
- Take an online Masterclass
Whatever it may be, this will prevent stress and burnout while providing you with positive memories.
Financial Move #7: Work with a Financial Advisor
A good financial advisor can be worth the cost if you're able to save more money, cut your expenses and better plan for the future. A financial advisor can also help you feel more secure in your financial situation, which can be priceless. Please do your research before hiring a planner.
- Consult with your parents on who they use
- Only hire an Advisor that holds themselves to a Fiduciary Standard
- Interview multiple advisors
- How are they compensated?
- What services do they provide?
- What are their qualifications and how do those qualifications benefit you?
2020 has been hard on everyone, personally, professionally and financially. As we prepare for the upcoming year, use these tips to help reduce financial stress as we all work towards a better year.
Chris Hais is the Portfolio Counselor of Ohana Wealth & Life Planning based in Cincinnati, OH. Ohana specializes in life and financial planning along with ESG (Environmental, Social, Governance) investing principles. The firm is an independent financial advisor and a fee-only fiduciary. Chris and the firm also enjoy volunteering and giving back to the local community. You can reach Chris at firstname.lastname@example.org.
This was prepared by Ohana Wealth & Life Planning; a federally registered investment adviser under the Investment Advisers Act of 1940. Registration as an investment adviser does not imply a certain level of skill or training. The oral and written communications of an adviser provide you with information about which you determine to hire or retain an adviser. Ohana Wealth & Life Planning Form ADV Part 2A & 2B can be obtained by written request directly to: Ohana Wealth & Life Planning 212 East Third St. Ste. #100 Cincinnati, OH 45202. All opinions and estimates constitute the firm’s judgment as of the date of this report and are subject to change without notice. This is provided to investment advisory services clients of Ohana Wealth & Life Planning. It is not intended as an offer or solicitation with respect to the purchase or sale of any security. Investing may involve risk including loss of principal. Investment returns, particularly over shorter time periods are highly dependent on trends in the various investment markets. Past performance is no guarantee of future results. The information herein was obtained from various sources. Ohana Wealth & Life Planning does not guarantee the accuracy or completeness of such information provided by third parties. The information given is as of the date indicated and believed to be reliable. Ohana Wealth & Life Planning assumes no obligation to update this information, or to advise on further developments relating to it. This is for informational purposes only. It does not address specific investment objectives, or the financial situation and the particular needs of any person. An index is a portfolio of specific securities, the performance of which is often used as a benchmark in judging the relative performance of certain asset classes. Indexes are unmanaged portfolios and investors cannot invest directly in an index. An index does not charge management fees or brokerage expenses, and no such fees or expenses were deducted from the performance shown.