7 tips for achieving your financial goals in 2021

2020 was unprecedented, at least in our lifetime. It taught us about the importance of having a financial plan and how financial stress can affect our overall health. It highlighted the need for an emergency financial plan for rainy days and showed us how critical it is to have some cash set aside in case we lose our job, without putting at risk our long term financial goals. You may be thinking – “Oh no, I have not gotten started on this one yet.” Well, January is still around and it is the best month to get started, so let’s do it!

Writing down your financial ideas and goals for 2021 will help you work towards your financial plan for the year. To do so, it may be a good idea to explore the following questions: Is there a dream goal that keeps coming up? Has the thought of saving more recently crossed your mind? Think about your ideas for 2021. How do you want to feel about your finances at the end of the year? Realize that getting control of your finances is important and is one of the best things you can do for yourself. We know it can feel overwhelming to get started. To help you on this journey, we have put together 7 tips for you to organize and materialize your financial objectives:

1. Define SMART financial goals.

2. Turn your goals into an action plan.

3. Stay committed to your plan.

4. Invest in financial education.

5. Start investing.

6. Track your progress and know your net worth.

7. Get an accountability partner or two.

Let’s now roll up our sleeves and get to work.

 1. Define SMART financial goals

The first step is to come up with SMART financial goals. Break them down into goals for the next 6 to 12 months (short term), 1-5 years (medium term) and more than 5 years (long term).

SMART means that your goals should be:

–Specific: this makes your goals feel more tangible and creates clarity. Think about the following questions: What specific amount are you saving each month? What % of your salary is going directly into your investing account every month? With this in mind you can conclude for example: “I will invest 50€ every month.”

–Measurable: putting a number to your goal makes it measurable and allows you to evaluate your progress. For example, if your goal is “I want to save 600€ this year,” you have something to measure your progress against every month.

-Achievable: define goals that are realistic and achievable. Start with small steps and get those accomplished first. They can be stretch goals, of course, but they must be realistic, so that at the end of the year you can give yourself a pat on the back. Progress brings fulfillment!

–Relevant: What are the most relevant goals for you? Is it having eventually saved 3 months of your salary, so you have an emergency back up plan? Maybe you already have your emergency plan figured out, so investing may be most relevant for you now. Perhaps it is to automate savings. Saving for your retirement is undoubtedly one of the most intelligent and relevant decisions!

–Time-bound: give your goal an end date and hold yourself accountable to it.

2. Turn your goals into an action plan

Once you know what your financial goals are, you can start writing down your plan to achieve them: How are you going to make sure you can save 50€ every month? Are you going to start by reviewing your expenses and setting up a new budget?

Be clear about how much of your monthly income you should set aside for your goals. Review what you spent by expense category over the past 6 months and think about how that may change this year. Create a monthly budget where you can incorporate your monthly fixed and extra expenses. You may want to budget for some vacation once we can leave the house! Once you know how you will achieve your goals, start taking action and stick to your plan. For example, if you say you will set up an automatic transfer towards your savings account every month after your paycheck comes in, then do that right away. Done is better than perfect, so just do it! Start with a small amount you are confident you can save. Small wins are critical and this could really take limited time but make the decision to do it.

3. Stay committed to your plan

When a new year begins, we have high expectations, high motivation and high energy. As the days pass, we quickly fall into routine and forget about our goals. Setting a plan and sticking to it is not easy. It takes work, effort, and discipline to do it.

A good way to stay committed is to have check ins and reminders in your calendar to make sure you get the steps done. Perhaps you need to set up a monthly “financial planning review date” to check in on your progress towards your goals. Perhaps you set up a monthly reminder to check that the savings goal has been transferred to your savings account or to make the transfer happen. There is not only one way to do it. For some people it works better to check once a week, for others once every 3 months is most effective. It will depend on your objectives and what feels right for you. We encourage you to experiment and find a way that works for you.

4. Invest in financial education

Financial literacy is the knowledge and understanding that enables you to make smart financial decisions and to effectively manage your personal finances. Women with greater financial literacy are more empowered to take care of their financial future. Check out our posts on Instagram where we have been recommending some books to get you started and other tips and advice.

When a new year begins, we have high expectations, high motivation and high energy. As the days pass, we quickly fall into a routine and forget about our goals. Setting a plan and sticking to it is not easy. It takes work, effort, and discipline to do it.

A good way to stay committed is to have check ins and reminders in your calendar to make sure you get the steps done. Perhaps you need to set up a monthly “financial planning review date” to check in on your progress towards your goals. Perhaps you set up a monthly reminder to check that the savings goal has been transferred to your savings account or to make the transfer happen. There is not only one way to do it. For some people it works better to check once a week, for others once every 3 months is most effective. It will depend on your objectives and what feels right for you. We encourage you to experiment and find a way that works for you.

5. Start investing!

Start investing to enjoy the benefit of compounding right away. The best moment is NOW! Consider the following to give you some momentum:

Why are you investing? You have already defined your goals and have your plan. Investing will be the means of achieving those goals (especially the long term ones) at a faster pace. What is investing going to help you make real: a home, retirement, etc.?

What are you investing in? There are hundreds of possibilities in the market. You could invest in ETFs, stocks, bonds, real estate, through ETFs or mutual funds for example. Consider also investing in sustainable companies, or companies led by women. Learn about ESG investments or investments in companies that care about environmental, social and corporate governance related impact.

There are hundreds of options to invest in and we know you have so many other things to worry about.  Therefore, Alice has put together the best of those options to make it easier for you.  Alice will manage your investments in order to achieve your financial goals. Our mission is to close the wealth gap between men and women.  We believe a way to address this gap is to help women invest.

Some goals take longer than others. No matter what, it is always important to track your progress and always celebrate success. This will make you keep yourself motivated during the process until you achieve your 2021 money goals!  Your net worth is the difference between your assets (what you own) and your liabilities (what you owe).  Track both and know what your net worth is and how it evolves.

7. Get an accountability partner or two

This is our final tip. There is nothing like having someone to speak with about your money, your progress, your struggles and your success. Find a friend or two, form an accountability group, do WhatsApp check-ins to see progress, set up quarterly review Zoom calls to chat about where you are, motivate each other and enjoy life together!

2021 we are ready for you! Remember to never invest in something you don’t understand. We are here to help, feel free to write us on Instagram or email.