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Financial control autumn 2021 | Haven Life

Make sure you are well on your way to reaching your goals this year – and start planning for 2022

Believe it or not, autumn is almost here – which means that there are only four months left before we end the tax year 2021 and start thinking about our 2022 goals.

The last two years have been atypical, to say the least. It includes income and expenses, in addition to everything else. Most of us spend less on travel and more on food, for example. Some of us may still be recovering from last year's redundancies and maturities, while others may have had the opportunity to start a new career or start a side.

"The principles of sound personal finance have not changed," said Jerry Ziegler, Accredited Financial Counselor® (AFC), owner of JZ Financial Management and a member of the Better Financial Counseling Network. "But the financial landscape has changed a lot."

In early 2021, we asked Ziegler and other financial experts how to set realistic, achievable financial goals during what may be an uncertain year. Now we'll get in touch with these and other experts to learn how you can end the year with as much financial security and safety as possible.

“For many, 2021 was not the bounce. years that everyone hoped for, ”explains Jim Wang, founder of WalletHacks. "It is important to adapt your goals to meet the realities of life."

With that in mind, here are some of the financial questions you should ask yourself before 2021 ends – and some expert insights to help you answer them. [19659010] In this article:

Is there still time to reach my financial goals 2021?

It's never too late to work towards your financial goals, but if you're trying to reach a specific goal by the end of the year, it may be time to make some adjustments to your spending and savings habits.

Start by identifying your most important financial goals. "Choose a goal that means the most to you and work toward it," said Grant Sabatier, author of Financial Freedom and co-founder of BankBonus.com. "You still have time to make big changes over the next four months, but focus only on one at a time."

To maintain your financial focus, set aside time to track your progress. "A monthly or even weekly check-in will help you stay on track with your financial goals," explains Steffa Mantilla, certified financial education instructor and founder of Money Tamer. Pair your weekly check-in with a measure to help you get closer to your big financial goal, such as transferring money to an emergency fund, making a credit card payment or using a budgeting app to track your recent expenses and make sure you are not spending more than you planned.

You may also want to consider changing your financial goal to better reflect the reality of your current financial situation. "If you were planning to save $ 5,000 for an emergency fund and have made little progress, adjust it to $ 2,000 and build in a savings plan to get started right now," says Wang.

Saving $ 2000 between now and the end of the year means setting aside $ 118 per week, starting on September 1st. If this financial plan feels a little too ambitious for you, try to set aside $ 50 per week. You will still end 2021 with an additional $ 850 in your emergency fund – and when you need to withdraw from your account, you will be happy that you set aside the money.

Or, as Mantilla puts it: “The best thing you can do in 2021 is make sure you have an emergency fund and pay off as much debt as you can.

What kind of tax planning do I need to think about?

It's never too early to start planning for the tax season (even if you do not have to go all over Ned Flanders ). Here's what our experts suggest you consider as the tax year 2021 draws to a close.

Start by asking yourself if your income in 2021 is significantly higher or lower than what you earned in 2020. "If your income has increased drastically or decreased during this time, you should check in with your CPA," explains Mantilla. "They will have knowledge of current tax laws and be able to tell you what to do to legally reduce your tax bill."

You should also ask your CPA if the recent changes in the child tax credit are likely to affect your upcoming tax return – or your expected repayment. "If you receive advance payments for child taxes, make sure you are prepared for any changes to your tax return," says Ziegler. "Most people who received the advance payments will see a tax relief of $ 200- $ 500 per child. For most people, this means a small refund and for some it may mean that they will owe money when they submit their tax return.

Asking yourself — and your CPA — whether raising your retirement contributions before taxes can help you reduce your taxable income. "Try to reach your maximum amount of $ 6,000 for a Roth IRA and $ 19,500 for a 401 (k)," says Sabatier, referring to the legal limits for those under 50. "The more you can contribute to these accounts the less you have taxable income – and, of course, the more you will invest. "

Wang agrees." I've made sure we contribute as much as we can to our 401 (k) because to defer income and lower our taxes. ”

How can I budget for the holidays?

The holiday period is closer than you think – and if you have not already started planning, budgeting and setting aside money for holiday expenses, it's time to start analyzing your cash flow.

Start by look at your previous holiday expenses How much did you spend in 2019 and 2020, and where did the majority of the money go? For example, did you spend the same amount of money on gifts both times, or do you spend more money on gifts in 2020 since you spent less money on travel

Knowing both your typical and atypical vacation expenses can help you plan your vacation budget for 2021. For some people, this vacation period will be relatively modest – especially if their finances are still recovering from the stress of the previous year. holiday period 2021 as an opportunity to compensate for last year's limitations.

"Although you may have stayed home last year, they may eight years may be different for many due to restrictions ", explains Mantilla. "You may now need to budget and plan for extra money for travel, gifts and other vacation expenses that you had not anticipated before."

Since we do not know what travel can look like in December, it is a good idea to set a budget that you can afford, whether it is airline tickets or not. If you set aside money for holiday travel and finally decide not to make the trip, you can use this money for other holiday expenses – or you can put it towards another financial goal, such as increasing your emergency fund or investing to support your financial future. .

"Choose a goal that means the most to you and work towards it."

—Grant Sabatier, author of Financial Freedom and co-founder of BankBonus.com

What can I do in 2021 to make 2022 my best fiscal year ever?

The end of the year will also be here before you know it – so it's a good idea to start thinking about how you want to earn, save and spend money in 2022. Setting a savings goal can help you budget and get better financially decision later.

"If you start planning early, you have a step up," says Sabatier. “What trips do you want to make? What major expenses do you need to plan for? Will you need more or less money? What changes do you want to make to your career?

Sabatier suggests that you start your financial planning for 2022 during the last quarter of 2021, but if your schedule is already full, it's okay to wait until the end of the year. "I like to develop my financial goals for next year during the last two weeks of December," says Ziegler. "In this way, I start the new year already on the right track."

When you start planning for 2022, you should think not only about your financial goals, your estimated income and your expected expenses, but also about whether the financial tools you are reusing will help or hinder your progress. "Much like the mess that ever exists in our home, there is still a bit of a mess in our economy that I would like to clean up," Wang explains. "This includes simplifying the various bank accounts we have but no longer need, reducing the number of credit cards we have and streamlining our financial system."

Part of a streamlined financial system includes knowing what to do with "extra" money – or with money that may have been set aside for an expense that is no longer needed. "What I really like about having my financial goals set and written down is when unexpected money comes in," says Ziegler. "Nine times out of ten, I know exactly how that money will be used, because I have already decided by having the goals in place."

Not sure what goals you want to set for next year? Try to think about your finances not in numbers, but in terms of the opportunities that these numbers can create.

Or, as Sabatier puts it: “Start thinking about what you want to live 2022 and start saving for it now.

You have four months, give or take – so take advantage of them.

Our editorial policy

Haven Life is a customer-centric life insurance company that is backed and 100% owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe that navigation decisions about life insurance, your personal finances and overall well-being can be refreshingly easy.

Our Editorial Policy

Haven Life is a customer-centric life insurance company backed and owned by the Massachusetts Mutual Life Insurance Company (MassMutual). We believe that navigation decisions about life insurance, your personal finances and overall well-being can be refreshingly easy.

Our content is created for educational purposes only. Haven Life does not support the companies, products, services or strategies discussed here, but we hope they can make your life a little less difficult if they suit your situation.

Haven Life is not authorized to provide tax, legal or investment advice. This material is not intended to provide and should not be relied upon for tax, legal or investment advice. Individuals are encouraged to consult their own taxes or attorneys.

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