2020 was a horrible year for finances, despite the stock market closing at record levels in the last part of the year. Massive unemployment, reduced spending power, and stay-at-home orders dominated the country for most of 2020. As we look ahead to 2021, the Cincinnati CPAs at LongSchaefer talk about some financial New Year’s resolutions to strengthen your bottom line.
Related Post: What Are the Benefits of Financial Planning?
Spend Stimulus Funds Wisely, If Possible
It took around nine months, but Congress finally passed (and the president signed) additional stimulus measures to prop up the fragile economy in December 2020. Spend this money wisely, if possible. Use it for essentials, save it for an emergency, or pay down credit card debt. Try not to splurge on anything with your stimulus payment because you don’t know what the economy will do in 2021.
Refinance Your Loans
One effect of the COVID-19 pandemic in 2020 was record-low mortgage rates. If you haven’t considered refinancing your mortgage yet, 2021 still presents an excellent opportunity to do so.
Congress’ stimulus package from March 2020 included a forbearance on student loan payments. Consider refinancing student loans before Jan. 31, when the forbearance timeframe ends.
Create a Solid Plan
Don’t have a solid financial plan in place for 2021? Now is the time to start one. Begin with your monthly budget and expenses. Find ways to start saving money at the start of 2021 to calculate how much you should have by the end of the year. LongSchaefer can help you create a solid financial plan for your windfall. Saving money brings us to our next point.
Begin an Emergency Fund
We can’t necessarily count on repeated stimulus money from the federal government, although federal policymakers have indicated more may be on the way. Rather than wait for federal money, use your planned savings to create an emergency fund. Experts say you should save at least six months’ worth of expenses in case you need them.
Start Saving for Retirement
Still need a resolution to follow for 2021? Boost your retirement savings. Contribute to an employer’s 401(k) matching plan. Diversify your investment portfolio for the long term by shying away from money market funds and moving towards long-term growth from stable mutual funds that invest in many types of securities. Your retirement savings add up quickly when you have a solid, consistent plan that you stick with over the years. LongSchaefer’s advisors can help you invest in the right funds for your unique situation.
Related Post: Reasons You Should Hire a Small Business Accountant
Happy New Year From LongSchaefer
The Cincinnati CPAs at LongSchaefer wish you and your family a Happy New Year for 2021! Contact us online or call (513) 245-0300 for more information on how we can help you achieve your financial goals this year.