3 ways to achieve your financial goals for 2021

3 Ways to Achieve Your Financial Goals for 2021


One bright spot in 2020 was that many people used their homes like never before. With so many working from home and using it for everything from gyms to classrooms, saving for a new house has moved up on the financial priority list to accommodate that flexibility.

If you’re looking for your first home or an upgrade, setting financial goals for 2021 should be one of your first priorities. The beginning of the year is the perfect time to set a budget and save for the home of your dreams. While there are different ways to budget, you have to commit to looking at your financial situation carefully.

Let 2021 be the year you begin the path to financial independence and good spending habits.

Allocate a specific amount to savings every pay period

One foolproof way to save is to pay yourself every time you get paid. By setting aside a predetermined amount every week or two, you will be pleased with how quickly funds can accumulate.

One strategy that some investment advisors like is the 50/20/30 plan. With this technique, you allocate 50% of your income to fixed expenses, 30% to discretionary spending, and 20% to savings. Alternatively, you may want to establish a specific dollar amount to save. For example, if your bi-weekly take-home pay is $4,000 and you want to save $1,000/month, set aside the $500 from your check first and use the remaining amount for expenses.

There are many online tools available too, which make it easier to save and budget from the convenience of your smart device. Do some research and find an app that can fit your needs and help you stay on track to your financial goals.

Pay down outstanding credit balances

Unless you have been extremely vigilant, chances are you have one or more credit cards with outstanding balances. If you’ve only been making the minimum payments, you may be incurring very high interest costs. If your cards are carrying high rates, your best return on investment may be to pay these balances down. This will also boost your credit score and lower your potential cost of a new home loan in 2021.

While it may seem impossible to pay down large balances, it starts with a budget. This is often one of the more difficult things for people to commit to. Without a budget though, it is quite easy to overspend. For many people, it’s also hard to sit down with their partner and go through the family budget in granular detail. However, looking at your financial situation objectively and truthfully will help you create an accurate budget that prioritizes saving and paying off debt.

Create smaller, achievable financial goals

Another way to save is to set smaller goals for yourself. Saying you want to buy a new home this year is a huge undertaking, but breaking it up into steps is more manageable to get you to where you want to be.

For example, if your credit score is 600 and you want to raise it to 700, you can accomplish this by reducing your outstanding credit balances and paying your bills on time. If you are inclined to frugality, look at your biggest bills, like groceries, and determine how you can lower them each week. You may be surprised how simple this can be – maybe it’s a matter of buying in bulk or choosing lesser-known brands.

At First Centennial Mortgage, we have a team of dedicated loan officers who are experienced with every type of home loan. Once you establish a solid savings for 2021, we can help you take that next step towards affording your dream home. Contact us today to learn more about how we can help you achieve your financial goals.

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