Resolutions and Solutions for 2021
Dec 1, 2020
Who could have accurately/fully/successfully planned for 2020? This was a tough year. Looking forward, we need to take what we learned from this year and apply it to 2021. It is not likely that we will see another year like this one (hopefully), but if we stick to our New Year’s resolutions and avoid overspending during the holidays we can be better prepared for 2021.
START BY BUILDING YOUR BUDGET
Look at your income sources and be clear about what your actual take-home pay comes to after taxes, insurance and savings . If you have been furloughed, research what you are still receiving from your company or from government stimulus support. If possible, save a little more and pay attention to changing government support. Much of it may be ending, but keep your eyes open for changes.
A great tool for reviewing your finances is a budget blueprint. It can give you a clear overview of your income and fixed expenses, like your rent or mortgage or car payments as well as fluctuating costs, like utilities, healthcare , groceries, and entertainment. Use this tool and you may discover new ways to manage and save your money more effectively.
TAKE SAVINGS GOALS SERIOUSLY
In truth, there is no one-amount-fits-all number for you or anyone , and goals will change as you get older. However, the rule of thumb for smart savings goals is three to six months of your average expenses. For the average 30-year-old, that would amount to between $14,000 and $28,000, depending on the expenses. Considering that we’re dealing with a rough economy due to the pandemic, those goals may be difficult for many people. Then again, not having any savings to fall back on during a similar event could be catastrophic for many people.
Honda FCU offers a range of savings accounts and investments depending on your interests.
READ YOUR CREDIT REPORT
If you’re serious about protecting yourself, it’s essential to know what the three main credit card reporting bureaus have to say about you. They are TransUnion, Equifax and Experian , and their mission is to collect and report consumer credit information. To ensure you are not being victimized by cyber criminals, request your credit reports each year.
BOOST YOUR RETIREMENT SAVINGS
Plan appropriately and one day you will thank yourself. Honda FCU offers an online retirement planning program that is designed to help you plan for a comfortable retirement. By letting time work for you, it will be easier to save for your future than you might imagine.
WORK OUT AT HOME
A typical gym membership starts in the $30 to $40 a month range and can be raised by initiation fees , court fees and guest fees. If you’re looking at ways to reprioritize your income, working out at home becomes more attractive. In addition, fears about COVID-19 make it safer to work out at home. To begin your search, check out the free at-home workouts available on YouTube. You’ll be amazed at your options.
EXPLORE FREE FINANCIAL EDUCATION OPPORTUNITIES
Speaking of videos, you can find lots of free educational content on managing your money, buying homes, getting loans, paying for college and more at the Honda FCU Financial Learning Hub. Plus, there are many popular podcasts on financial issues, such as So Money or The Dave Ramsey Show that can help you make informed decisions on your finances. They are easy to listen to when it’s convenient for you.
INCREASE YOUR HSA CONTRIBUTION
Health savings account (HSA) contribution limits for 2021 are going up. For self-only coverage, limits are going up to $3,600, and up to $7,200 for family coverage. While increases in HSA contribution limits are tied to inflation rates, health care costs outpace inflation, meaning Americans will likely spend more out-of-pocket each year. That’s why fully funding your HSA can save you money now and in retirement.
Employers may fund the HSA or allow employees to contribute to it with before-tax dollars, even if the company does not offer health insurance. You can also fund an HSA with after-tax dollars and benefit from tax deductions.
GET HELP WITH YOUR QUESTIONS AND RESOLUTIONS
From choosing the right savings accounts to making budgeting and investment decisions, there are lots of ways to prepare for your New Year’s resolutions for 2021. For helpful and practical advice, speak to a Honda FCU adviser today.