With 2021 well underway now is a great time to take some steps to set yourself up for financial success. We’ve talked with the experts and here is what we heard over and over again.
Four financial goals everyone agrees that you should tackle in 2021:
1. Pay Down Debt
The goal should be paying off ALL your credit cards as fast as possible and then paying them off every month. Consider consolidating all your debt into one more manageable payment. This is not only good for your financial health and also your mental health as it should reduce financial stress.
2. Boost Your Credit Score
A “good” credit score is considered anywhere from 670 to 740. This ensures that you qualify for credit at a competitive rate, thus saving you money. There are lots of different sites you can find to determine your credit score is currently.
How do you improve your credit score?
＄Make sure you pay ALL your bills on time.
＄Pay off your credit cards.
＄Find out what your credit score is before applying for more credit. If your score isn’t great, wait.
3. Build An Emergency Fund
If 2020 taught us anything it was the importance of an emergency fund. Experts agree to start right now by making contributions to that fund every month. Opening a separate savings account where the funds are automatically deposited from your paycheque has been found to be met with the most success. How big should it be? There are lots of online calculators that consider your monthly expenses (including your debt load), your existing savings & the stability of your income. Experts seem to agree that your emergency fund should cover 3 to 6 months of living expenses.
4. Review your Mortgage
If you are a homeowner this is a good time to review your existing mortgage. If you are unhappy with your current rate, refinancing might be something to consider. It’s important to keep in mind any penalties involved in refinancing your mortgage. There are a bunch of different reasons for refinancing your home, taking advantage of better interest rates, taking money out of the home for renovating to name but a few.
Knowing that your finances are in order is integral to making smart financial decisions in the future. Whether it be selling your home or planning for a trip around the world.
This information should not be relied on as legal advice, financial advice, or a definitive statement of the law in any jurisdiction. For such advice, please consult your own legal counsel or financial representative.
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