How to prioritize your financial goals for 2021

How to prioritize your financial goals for 2021

Goal setting can help motivate us to work extra hard to achieve things that we might not have been able to if we didn’t aim for them.

With this in mind, here are some financial goals to think about when prioritizing for 2021.

Saving for Your Child’s Education

One of the best gifts a parent can give their child is an education that’s fully paid for. Even if you’ve been fortunate enough to hold onto your job during the pandemic, you’re probably not spending as much as you used to.

Why not put this extra cash towards your child’s education? By contributing to a Registered Education Savings Plan (RESP), you can help provide a brighter future for your child. When you open an RESP and add $2,500, your child will qualify for a $500 Canada Education Savings Grant. That’s like an instant 20% return on your money!

Saving for Retirement

Do you have a gold plated pension plan? If so, you might not need to save for retirement.

For everyone else, you’ll need to continue to put money aside for life after work. Why not get into a good habit of regularly contributing towards retirement?

A good rule is to put 10% of your pay cheque towards your retirement every month. If you can’t afford to do that right away, that’s okay. Aim to save whatever you can afford. Even if it’s only two or three per cent, every little bit helps. You can aim to eventually save 10% in the future.

Saving to Buy a Home

With mortgage rates near a record low, there’s never been a better time to buy a home.

If you’re considering a new home, it’s a good idea to speak with a mortgage professional ahead of time. A mortgage professional can pre-approve you for a mortgage, allowing you to refine your search and only focus on homes that are inside your budget, saving you valuable time.

How to Go About Saving for Your 2021 Goals

Saving money is often easier said than done. Here are a couple ways to actually pull it off:

Pay Yourself First

Probably the easiest way to save money is by paying yourself first. Paying yourself first involves treating savings like a line item in your budget. Through automatic deposits, you can make sure your money is automatically put towards your savings, which can be used to fund your retirement or your child’s RESP. The money goes into another account before you’re tempted to spend it, making it easier to stay on budget.

Use Found Money

Another strategy is to use so-called “found money”. Found money is money that you receive on an irregular basis that you may not have been expecting. Examples may include bonuses at work, inheritance and tax refunds.

By saving some or all of your found money instead of spending it, you’ll be well on your way to accomplishing your financial goals in 2021.