5 Ways to Focus on Finances for the New Year
It’s common practice to start the new year by making resolutions. Whether we keep them, however, is another matter. Diets go by the wayside, as do promises to ditch bad habits. But that doesn’t mean resolutions are pointless. In fact, they can be very helpful — as long as you have a plan and the discipline to implement them.
One of the easiest things to plan is a budget. Besides, so many things have changed for both individuals and businesses, thanks to the pandemic.[Small business finances – more resources from SmartHustle.com]
If you’re focusing on finances this year, here are some ideas to get you started.
1. Tighten your belt
If your income has taken a hit from the virus or the evolving economy, the first things you should look for are ways to save.
Go over your budget and eliminate unnecessary expenses, whether they’re luxury items, more expensive meals, entertainment options (how many streaming services do you really need?), or something else.
Whether you’re looking for a free service, aiming to save, budgeting as a couple, or planning for the entire family, there are software options that can help you manage the money balancing act.
If you prefer working from your phone rather than your PC, there’s a selection of apps, as well.
2. Find new ways to make money
If you’ve cut everything you can down to the bare bones and you’re still coming up short, you’ll need to look for another way to make ends meet. Finding a new income stream is the perfect option. (Heck, even if you’re not scraping the bottom of the barrel, you might want to explore this option to give yourself some breathing room.)
Delivery services took off during the pandemic, and so did work-from-home consulting gigs. Some people offered dog-walking services. Others even made good money renting out their RVs. The good news is that, in the digital economy, you can set up money-making outlets like Etsy shops online at a minimal cost.
Maybe you even have a lot of knickknacks and collectibles you aren’t using that could fetch a decent price on eBay. Hardback books you’ve read, needlepoint kits you bought but never got around to using, that old comic book collection… There are plenty of possibilities.
But be careful: The virus won’t be with us forever, so unless you just need something temporary to tide yourself over, don’t depend solely on a gig that will shrivel up when the brick-and-mortar economy opens up again (or when you run out of stuff to sell).
3. Build (or rebuild) your credit
The pandemic and the uncertainty that’s come with it might have left your finances in a far different shape than when the year began. Many of us have been forced to dip into our savings or credit to stay afloat amid layoffs, furloughs, and other financial uncertainties.
If you’re in that situation, 2021 can offer you a great opportunity to rebuild your credit.
Having good credit is important, as you may need it in the future to make a major purchase. Besides, you don’t want bill collectors breathing down your neck because you haven’t made a payment.
Maybe you don’t know much about how to improve your credit score, or even what it is. If that’s the case, you should know you’re entitled to a free credit report once a year. That’s the place to start, then consult online resources for smart steps toward that higher number.
4. Examine your insurance
Insurance is one way to avoid or minimize unexpected expenses. Without good insurance, a hospital stay or an auto accident can be catastrophic. But it’s not as easy as simply putting down some money and getting insured.
There are many different types of insurance, with various clauses, deductibles, and monthly payment levels.
As a result, it’s important to read policies carefully and compare them before signing anything. Some companies even offer discounts for bundling (for instance) car and homeowner’s insurance.
When weighing your options, be sure you’re not paying extra for overlapping coverage, and know how to get the best deal for your specific needs.
5. Learn a new skill
Making yourself more marketable is never a bad idea, and what better time than a new year to learn a new skill?
You can go back to school for a degree or certificate, but if you’re trying to save money, there are plenty of low- and no-cost opportunities available, as well.
If you’re working for a traditional employer, check with HR to see about training opportunities. You’ll be more marketable in the event of downsizing if you can work in more than one position or department.
There are plenty of opportunities to learn new skills online, too, often without paying a dime. YouTube how-to videos can be a great resource, and even prestigious universities like Harvard offer free online learning opportunities.
When it comes right down to it, the new year is a great time to reassess your financial situation and rethink your financial goals. If you’ve been discouraged by a very turbulent year, it’s also the perfect time to start fresh.
Whether you’re learning a new skill, trying out new budgeting software, or creating a new stream of income, you’ll be putting yourself in a better position for your future.
Jessica Larson, SolopreneurJournal.com
My name is Jessica Larson. I’m a married Midwestern mom and a solopreneur. I create online courses for students, and I’ve started and run several other businesses through the years. My goals are to support my family while still actually spending time with them, to act as an entrepreneurial role model for my two daughters, and to share what I’ve learned through The Solopreneur Journal.