facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog external search brokercheck brokercheck Play Pause
Hindsight Is 2020: 5 Ways We Should All Treat Our Money Differently in 2021 Thumbnail

Hindsight Is 2020: 5 Ways We Should All Treat Our Money Differently in 2021


2020 is a year most of us would prefer to forget. When the year started, nobody expected natural disasters of historic proportion, the COVID-19 pandemic or the residual economic hardships that followed. But with the first year of the new decade officially behind us, how can you better prepare your finances for whatever 2021 may bring? Our suggestions are below. 

1: Establish an Emergency Fund

If 2020 taught us anything, it’s the importance of preparing for the unexpected. Establishing an emergency fund is crucial when it comes to being financially ready for medical emergencies, house repairs, car maintenance, etc.

Money tucked away in an emergency fund is meant to help cover the costs that are not part of your normal monthly expenses. Without an emergency fund, any unexpected event, even a small one, could set you back significantly. While you may not be able to put the same amount away every month, every little bit helps, and it’s important to put aside what you can.

The Consumer Finance Protection Bureau recommends a few simple strategies for establishing and adding to your emergency fund1: We concur. 

  • Create a savings habit
  • Manage your cash flow
  • Take advantage of any additional money coming in
  • Automate your savings

Create a Savings Habit

Try to be as consistent as possible when putting away money.

To turn your ability to save money into a regular habit, you could try:

  • Setting a specific goal for yourself and your savings
  • Creating a system for making consistent contributions
  • Monitoring your progress
  • Rewarding yourself for meeting your goals (within reason) before setting new ones

Manage your Cash Flow

Keep track of how and when money is coming in, as well as how much is going out.

Take Advantage of Additional Money Coming In

If you get a bonus at work or receive a monetary gift, consider putting that extra cash towards your emergency savings. This is a great time to either get ahead or catch up if you were not able to contribute as much as you would have liked another month.

Automate Your Savings

Establish automatic transfers through your bank, which will allow money to be directed to your savings account automatically each month. Choose an amount, pick a date each month and adjust as you need throughout the year. 

2: Save More Money

You’ve heard the phrase, “Every little bit counts,” all your life - but it couldn’t be more true. If you enjoy grabbing a coffee before work, start making a pot at home. If you go out to eat twice a week, cut down to once a week or every other week. Many of us are continuing to work from home, which cuts down on the need to buy as many clothes for work, which is another way to save.

While it’s an adjustment, these small “sacrifices” can yield significant results over time. Say you skip eating out one day a week, saving you around $20 on average. In the span of a year, that $20 becomes $1,040. 

3: Review Your Tax Situation

With tax season approaching, there are a couple of things you could consider doing now to maximize the financial impact of your tax refund. For example, you may find it more beneficial to have your refund split between paychecks throughout the year. To do this, you would need to adjust your tax withholdings with your employer. Now’s an ideal time to speak with your financial advisor, CPA or other financial professional to discuss what changes you should be making now to get the most out of your tax situation for the coming year.

4: Set Goals

Ask yourself what you want to accomplish in the months to come. Is there a certain amount you’d like to have tucked away in your savings? Or maybe you’re focused on getting a promotion at work? Whatever it may be, set a specific (and attainable) goal that you can focus on working towards in 2021. 

In a world where we’re all recovering from economic and environmental hurdles, progress is worth celebrating - and worth pursuing.

5: Start Automating 

Automation is an incredibly effective tool when it comes to working toward and achieving your financial goals.

Some things to consider automating include:

  • Bill paying
  • Investments
  • Paychecks
  • Loans (Your mortgage, student loans, car payments, etc.)
  • Savings

Automating as much of your financial life as you can takes the human connection and decision-making out of the picture. It cuts down on late payments, and it can make contributing to your savings account hassle-free.

We all are hoping for a better 2021, however, it’s always best to be prepared especially when it comes to your finances. These tips should help with the transition into a new year - hopefully, all of us can breathe a little easier, save for the future and have some fun.

If you have Questions regarding how to get started or what our services can do for you hit the contact button below. 


  1. https://www.consumerfinance.gov/start-small-save-up/start-saving/an-essential-guide-to-building-an-emergency-fund/

This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.