Looking ahead to next year might seem daunting but the following tips can help you focus on making robust, achievable plans
The only thing we can be certain of as we look ahead to the new year is uncertainty. But that doesn’t mean you shouldn’t set goals for both your financial and emotional well-being. Everything can change and evolve around you, but typically your big goals will remain unchanged. And it’s important to remember that you can still achieve your goals despite the unknowns. With a well thought out plan and a positive outlook, you can take the required steps towards making those goals become a reality.
Back to basics
When it comes to your financial health, there are three fundamental golden rules to remember as we look ahead to next year:
- Look closely at your cash flow and do everything possible to make sure you have more money coming in than going out. Hold yourself accountable for your expenditure and if you need to balance what you spend with what you’re earning then make sure you take action to remedy the numbers.
- Make sure you have an emergency fund. In ‘normal times’ we always recommended having savings to cover 3-6 months of your living expenses (mortgage or rent, bills etc) but given the current circumstances, boosting that to nine months for an extra safety net is a great idea if possible.
- Consider a second income stream. The last 12 months have taught us that nothing is guaranteed, so in 2021 you should think about securing another source of income if at all possible, to mitigate risk and, again, give yourself a financial cushion.
Be flexible if required
It makes sense to be a bit more flexible with your goals and review them more often during uncertain times. However, most people won’t need to change their financial goals. If you have built a long-term financial plan, you do so in the knowledge that the road won’t always be smooth. To put your mind at ease and continue to review your plan, together we can set quarterly meetings to assess your situation and agree the steps you can take to adapt your plan. If you’re financially sound, your focus and the planning decisions you make will depend a lot on your age and personal circumstances.
Choose your own goals
Break your goals into bite-sized chunks. Give yourself daily, weekly and monthly steps to achieve those goals and focus on them. Putting them down on paper will help you achieve your goals. By writing them out, you create a simple target at which to aim because you can literally see your thoughts. When you accomplish one, move on and tackle the next one. And when it comes to setting goals, make sure they’re yours alone – trying to achieve something is much harder if you’re really doing it because somebody else wants you to. You need to be determined to accomplish these goals for yourself.
Stay healthy in body and mind
The continuing uncertainty we are all suffering can play havoc with people’s mental health and well-being. As we look ahead to 2021, the basics tenets of looking after yourself remain the same but take on extra importance. Eating well and exercising will lower your anxiety levels, help you to better regulate your emotions, and improve your sleep. Establishing a regular routine will help, as does creating a clear distinction between work and non-work time, both physically and mentally. Try to get outside and enjoy some natural light every day. If this isn’t possible, you could sit by a window to work, which can help give you a sense of space.
It can be easy to feel isolated at the moment, especially if you are working remotely and aren’t able to see family and friends as regularly as you would like. Zoom quizzes and virtual meetups may seem like poor substitutes for the real thing but they are worth doing even if you have Zoom fatigue and will help sustain you and your relationships. If you are feeling low or anxious, try to talk about this with someone you trust. This can be especially helpful if they are in a similar situation.
Focus on the big picture
With the new year looming, instead of worrying about what you don’t know, focus on what you can control instead. Channelling your energy into those things can help bring anxiety levels down and help you to address the bigger things with a more level head. And this, in turn, will help you to achieve your financial goals for 2021, while maintaining your health and emotional well-being in the process.