How is it already the season to be muttering New Year’s resolutions? In the year that’s felt like it’s lasted for 84 years one moment, and 11 minutes the next, it’s no surprise we’re less than ready to be setting lofty goals for 2021.
But despite the horror show of 2020, a New Year means a fresh new start—which also means a renewed sense of optimism and a chance to overhaul your finances. Boom! Here are our top five money resolutions to make for 2021:
#1 Track Your Spending For At Least 1 Week Per Quarter
The biggest thief of financial progress is accidental ignorance. If you do one thing for your finances in 2021, make it a regular peek at what’s really happening in your bank account. We’re not saying stay home and count your pennies instead of soaking up the best of the Aperol season, but at least once every three months, track your spending for a few days. The sooner you get on top of those little money leaks, the less chance they have of ruining your financial progress.
#2 Work With Your Calendar
Using your calendar to help you budget can be an amazing hack to save big bucks without sacrificing your best life. If you find that some weeks you’d rather be splashing your cash than stashing it, opt for a more dynamic budgeting style that works with your schedule. Instead of having one set budgeting routine that sees every dollar from every pay get allocated in the same way, choose specific weeks where you’ll save more (i.e. when you’re less busy) and leave some weeks as more spendy ones. By saving more in one hit rather than small amounts gradually, you get the same total outcome, without having to be sticking to your budget all the time.
#3 Automate, Automate, Automate
Where possible, automate your life and your finances; it makes managing your money simple and repeatable… which means more dollars into your savings account and less time worrying about it! Your savings habits become second nature and can be left to add up without you even putting down your glass of vino to notice.
Firstly, there’s automating your savings and bills. By setting up an auto transfer on payday, you can funnel your cash into savings accounts and get all your bills paid without lifting a finger. Then, see what other areas of your life you can automate. Whether that’s getting your toilet paper on subscription or signing up to a meal delivery service that regulates your grocery spend, simplifying your spending is where the magic happens, because you can kick back and live your best life while your financial goals take care of themselves.
#4 Compartmentalise Your Accounts
Golden rule of financial management: keep your spending money separate from your bills money. It’s a simple change that’ll transform the way you manage your income, and prevents you accidentally splurging your rent on another bottle of cabernet.
Whether you want to take it a step further and compartmentalise your savings and spending accounts into more granular categories is up to you but start with isolating your spending money from your bills and you’ll notice a big difference in your financial organisation skills.
#5 Set A Percentage Rule For All Money That Comes Your Way
If you’re often left wondering where all your money went—your salary, perhaps a work bonus, or even your $50 birthday bucks from Grandma—try setting a percentage rule for every dollar that comes your way. That way, you can be sure that every time money comes in, you’re splitting your money between needs, wants and goals at the same time.
Try starting with 50/30/20–50% to needs, 30% to wants and 20% to goals–or set up your own model that works for you and your income.
Keen for more budget hacks to save more with less effort? Try our guide to budget cycling.
Image Credit: Toa Heftiba
Emma is a finance blogger at The Broke Generation and a reformed spendaholic. She shares hot tips on saving, property, tax, career and investing for millennials who want to break the spending cycle and get financially confident.