Want to get yours personal finances in shape? Then the start of the year is a perfect excuse to do this. Whether 2020 was a good or bad year for you, it’s time to move onwards and upwards in 2021.

In the blog post I will be giving you four tips to prepare yourself financially for the year ahead.

Set Goals

Setting goals is powerful, it can help provide direction and help to keep you on track. But, goals are a bit pointless if you aren’t working towards them or if they are too unrealistic.

It is important to set goals for 2021 in aspects of your life – personal goals, career goals, fitness goals, and so on. For example, reading X amount of books, running Y amount of miles and signing up to our Newsletter so you increase your financial education each month ๐Ÿ˜‰.

Don’t overlook the importance ofย setting financial goals too. As after all money is the thing that causes us both the most happiness and most unhappiness, as well as the most stress.

Make 2021 the year where you set some financial goals.

Need some broad examples?

  • Become debt-free
  • Negotiate a salary increase
  • Save ยฃ10,000
  • Invest ยฃ3,000
  • Set up an automatic monthly investment for ยฃ100
  • Budget each month

You have probably heard of ‘SMART’ goals. Setting goals in this way is very handy because it means that you have actually set a good goal. The most important aspect is to ensure that your goal specific – for example ‘invest ยฃ3,000’ is very broad, ‘investing ยฃ2,000 in global index funds and ยฃ1,000 in individual stocks’ is a much better goal.

Want to get your personal finances in shape? Then the start of the year is a perfect excuse to do this. Whether 2020 was a good or bad year for you, it’s time to move onwards and upwards in 2021.

In the blog post I will be giving you four tips to prepare yourself financially for the year ahead.

Set Goals

Setting goals is powerful, it can help provide direction and help to keep you on track. But, goals are a bit pointless if you aren’t working towards them or if they are too unrealistic.

It is important to set goals for 2021 in aspects of your life – personal goals, career goals, fitness goals, and so on. For example, reading X amount of books, running Y amount of miles and signing up to our Newsletter so you increase your financial education each month ๐Ÿ˜‰.

Don’t overlook the importance ofย setting financial goals too. As after all money is the thing that causes us both the most happiness and most unhappiness, as well as the most stress.

Make 2021 the year where you set some financial goals.

Need some broad examples?

  • Become debt-free
  • Negotiate a salary increase
  • Save ยฃ10,000
  • Invest ยฃ3,000
  • Set up an automatic monthly investment for ยฃ100
  • Budget each month

You have probably heard of ‘SMART’ goals. Setting goals in this way is very handy because it means that you have actually set a good goal. The most important aspect is to ensure that your goal specific – for example ‘invest ยฃ3,000’ is very broad, ‘investing ยฃ2,000 in global index funds and ยฃ1,000 in individual stocks’ is a much better goal.

Open Your Banking Apps

I find it crazy when people don’t know how much money they have…. how don’t you know?! Open your banking apps and look!

I understand that after a night out you may not want to look ๐Ÿ˜… but in general you should know how much money you have.

Personally, I have a Google Doc and a sheet with a subheading titled ‘Track Easy Access Cash’ – this allows me to see roughly how much money I have with the various different bank accounts I use.

I understand that this approach isn’t for everyone (it probably is a bit over the top), but you need to be opening your banking apps weekly and understand how much money you have, and where it’s going.

This will help you understand your spending habits as a priority and enable to see where you are overspending.

If you can try and funnel some more money to savings and investments!

Track Your Net Worth

Tracking your net worth is invaluable. We are able to get an immediate snapshot of how much we are worth and how this changes over time.

To track your net worth:

Net Worth = Assets – Liabilities

Assets include any stocks and funds you own, held within either an ISA, pension or general investment account. Bonds, crypto, property equity are all assets. You can either go as far as including any valuable watches, art or fine.

Liabilities include your mortgage, car loan and any debt you have. I also like to track my short-term credit card debt so I know my net cash position.

Take your liabilities away from you assets and you end up with your net worth. The only thing you need to do now is track your net worth monthly (or quarterly/annually) and see how it changes over time!

Open Your Banking Apps

I find it crazy when people don’t know how much money they have…. how don’t you know?! Open your banking apps and look!

I understand that after a night out you may not want to look ๐Ÿ˜… but in general you should know how much money you have.

Personally, I have a Google Doc and a sheet with a subheading titled ‘Track Easy Access Cash’ – this allows me to see roughly how much money I have with the various different bank accounts I use.

I understand that this approach isn’t for everyone (it probably is a bit over the top), but you need to be opening your banking apps weekly and understand how much money you have, and where it’s going.

This will help you understand your spending habits as a priority and enable to see where you are overspending.

If you can try and funnel some more money to savings and investments!

Track Your Net Worth

Tracking your net worth is invaluable. We are able to get an immediate snapshot of how much we are worth and how this changes over time.

To track your net worth:

Net Worth = Assets – Liabilities

Assets include any stocks and funds you own, held within either an ISA, pension or general investment account. Bonds, crypto, property equity are all assets. You can either go as far as including any valuable watches, art or fine.

Liabilities include your mortgage, car loan and any debt you have. I also like to track my short-term credit card debt so I know my net cash position.

Take your liabilities away from you assets and you end up with your net worth. The only thing you need to do now is track your net worth monthly (or quarterly/annually) and see how it changes over time!

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Receive the latest Personal Finance, Investing and Property information straight to your inbox!

We won’t spam you whatsoever, and will never share your details.

Simplify Your Finances

Automation is key!

Personally, I like to automate as much as possible.

  • Pay off my credit card automatically each month via a direct debit
  • Invest automatically into my S&S ISA
  • Invest automatically into my LISA
  • Save automatically into my regular saver

You can also automate paying your bills, transferring money to various sinking funds, donating to charity, and so on.

I think automating as much of your finances as possible is the best decision you could ever make. At that point, building wealth becomes much more passive and hands-off and you can spend time doing things you enjoy rather than moving your money around manually.

Feel free to let me your thoughts on this blog post by contacting me on Instagram or by emailing me at makingmoneysimple1@gmail.com.

Simplify Your Finances

Automation is key!

Personally, I like to automate as much as possible.

  • Pay off my credit card automatically each month via a direct debit
  • Invest automatically into my S&S ISA
  • Invest automatically into my LISA
  • Save automatically into my regular saver

You can also automate paying your bills, transferring money to various sinking funds, donating to charity, and so on.

I think automating as much of your finances as possible is the best decision you could ever make. At that point, building wealth becomes much more passive and hands-off and you can spend time doing things you enjoy rather than moving your money around manually.

Feel free to let me your thoughts on this blog post by contacting me on Instagram or by emailing me at makingmoneysimple1@gmail.com.

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