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Take a deep breath. Clocks are ticking down, and we are about to say good riddance bye to 2020. Phew.



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It has been a year like no other. Along with health challenges, worldwide lockdowns, and emotional upheaval, 2020 has completely turned normalcy upside down.

With life continuing to change each day rapidly, planning for 2021 is a tall order.

But if this year has taught me anything, it is that change is always around the corner. And the least I can do is to prepare for any uncertainty to the best of my ability.

In case of sudden disaster (sorry to be a Debbie Downer right now), financial stability can provide priceless peace of mind. And while money will not shield you from all of life’s punches, it will at least soften the blows.

If you are looking for inspiration to make your new year’s financial resolutions and goals, look no further.

Here is a list of goals to help you manage your finances better, and (if 2021 is kind), maybe even make it your wealthiest year yet.

Review your spending and follow a budget

I’m not one to suggest cutting out everything you enjoy.

Like dinner takeouts or going out to the movies, simple pleasures bring joy and add a little bit of sunshine into our lives. And this makes them valid purchases in my books.

It may, however, surprise you to find out where some of your money goes. The small and seemingly insignificant purchases tend to add up quickly. And before you know it, you find yourself in financial difficulty.

My take is to have a plan for your expenses by creating a budget.

Creating a budget allows you to take an honest look at your spending habits and note any areas of weakness.

For example, in creating a budget, you may discover that you have been paying for things you don’t use (various subscriptions and memberships).

Eliminate any expenses that do not serve any purpose in your life.

A budget, much like a diet, is only as good as the extent to which you stick to it; this is the crucial reason why your budget should be realistic and practical.

A good budget plan should allocate money to basic needs, fun activities, and your financial future as well.

With a plan in place, you can buy anything you like to indulge in (more chai tea lattes & pedicures for me, please) within budget and completely guilt-free.

Build an emergency fund

The unprecedented year that 2020 was makes this financial new year’s resolution resonate even more. 

An emergency fund is money set aside to take care of any financial surprises that may come your way.

An emergency could be a pricey home or car repair, surprise medical bills, job loss, etc.  

The Covid 19 pandemic has demonstrated that the unexpected could happen at any time.

Without an emergency fund, you may have to rely on high-interest debt such as personal loans and credit cards to tide you over. The cost of such debt may end up being more than you bargained for.

A healthy emergency fund should be about three to six months of your basic living expenses. Depending on your situation (number of income sources, number of dependents, etc.), you may adjust the amount to suit your needs more appropriately.

Planning for a rainy day turns what would otherwise be a financial landmine into a mere inconvenience.

An emergency fund buys you some time to get your feet on the ground again in times of financial crises.

Get rid of high-interest debt

Once you have emergency funds and all your needs are met, financial experts recommend paying off high-interest debt before investing.

There is no hard number of what constitutes high-interest. Generally, however, any debt with the following two characteristics is high-interest:

  • The interest rate is higher than the mortgage and student loan interest rates
  • The interest rate is higher than the rate of return from investing

By carrying high-interest debt, you forefeit other more profitable and meaningful uses for your money. And since investment returns are typically lower than the cost of such debt, you are better off tackling these types of loans first.

Further, high-interest debt takes away your freedom. The real cost of such loans (or any credit, to be honest) is not saving for your dream house, next great vacation, retirement, etc.

High-interest debt is expensive, and it eats away at your hard-earned money.

For example, a $1,000 credit card balance with an APR of 14.75% is up to $147.50 per year of additional interest payments. Naturally, the higher the credit balance, the more interest you have to pay. This interest is money that could otherwise help you reach your financial goals sooner.

Typical high-interest debt may include credit card balances, payday loans, private student loans, some car loans, etc.

Not all credit is bad. In fact, you need to demonstrate good debt management to build your credit.

It may also be impractical to avoid using credit cards altogether in this increasingly digital age.

The crucial thing is to pay off high-interest debts in full each month and keep your overall credit utilization minimal.

Improve your credit score

A credit score is a measure of your creditworthiness. It indicates how well you handle financial obligations.

Various parties may be interested in your credit score. Below is a list of instances when your credit score may be necessary:

  • Landlords use credit scores to determine whether to rent a property to you
  • Lenders evaluate your credit score to determine whether to give you a loan and at what rate
  • Insurance companies may use your credit score to set auto or home insurance premiums
  • During an interview process, employers may use your credit score to establish how well you handle responsibilities

A high credit score goes a long way to helping you get approved for loans and to get lower interest rates. A low credit score could mean paying more or even completely missing out.

Given the extent of its impact on your life, improving your credit score is a worthwhile financial new year’s resolution.

Be sure to take the following steps to give your credit score a boost:

  • Pay your bills on time every time. Even a single missed payment can have a significant negative impact on your score.
  • Maintain a low credit utilization, that is, only use a small percentage of the credit available to you. In other words, pay off your credit cards in full each month and never max them out.
  • Maintain a good mix of credit to demonstrate that you can handle multiple obligations well.
  • Keep old credit cards open to avoid lowering your average credit history.
  • Check your credit score regularly and dispute any errors promptly.

Up your financial literacy game

Financial literacy is an understanding of various personal finance topics such as budgeting, saving, and investing.

While not typically taught in schools, financial literacy is an essential life skill.

A lack of proper financial education can have a significant negative impact on most aspects of your life for many years. For example, money problems often lead to more stress and conflict among couples.

It takes time to build this life skill, but the good news is that the information is readily available. A great way to build your financial literacy is to dive into personal finance books and blogs.

Since you are here reading this blog, you are already on your way to hitting this goal!

Invest more and Save for Retirement

Like most millennials (truthfully, every generation), saving for retirement is often pushed to the backburner.

There are many, nearly convincing excuses to not save for retirement. Deep down, though, we all know we should set aside some funds for our golden years.

Here are some reasons why you should start saving for retirement (asap):

  • The fantastic news of having longer life spans may, unfortunately, mean outliving your savings
  • You do not want to become a financial burden to your children
  • The income available through social security may not be sufficient for all your needs
  • Most employers no longer offer pensions or contributions to retirement savings
  • You can lower your tax burden by using long-term savings plans such as the RRSP and TFSA
  • Investing helps your money to keep up with inflation

Boost your income

Budgeting and saving are excellent ways to manage your finances, but nothing does a better job of improving your finances than an income boost.

There is a limit to the number of expenses you can cut back on without compromising your life quality.

When appropriately managed, additional income helps you to reach your financial goals so much quicker.

Here are some ways to consider to boost your income in the new year:

  • Learn a new income-enhancing skill (e.g., go back to school, learn how to code)
  • Take up a side-hustle. There are so many ways to make money online today.
  • Demonstrate value at your current job and ask for a raise


While you can make a change at any time, December/January is a great time to make resolutions and set goals for the upcoming year.

Financial goals do not have to be restrictive, and neither do you have to give up everything you cherish.

All it takes is a clear and concise plan for your money to get you closer to achieving your financial objectives.

Next, build a healthy emergency fund, pay off high-interest debt, increase your credit score, build financial literacy, invest more while finding ways to boost your income.

I wish you a Merry Christmas and a Happy New Year!

“Be always at war with your vices, at peace with your neighbours, and let each New Year find you a better man.” – Benjamin Franklin


Financial Goals & Resolutions

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Ever feel like money just seems to slip through your fingers month after month? Our Monthly Budget Tracker will guide you to start making the most of every dollar. It’s a game changer—get it free for a limited time!

Nikki Kirimi

Nikki Kirimi is a recognized finance professional (MBA, CPA, CMA) and founder of Money World Basics. Her personal finance advice has been featured in Yahoo Finance, MSN, and Go Banking Rates.