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Making a Budget for your Financial Goals in 2021

Dec 09, 2020
If we have learned one thing in 2020, it is that no matter how much we plan and prepare for our future, we can’t control everything. If you walked into this year with big plans and audacious dreams only to be knocked down a few pegs by this global pandemic, it’s okay. 

So, what do you do when you’ve been thrown off course and your goals seem further away than ever? How do you get your finances in check when they’re anything but certain? Is it even possible to create and stick to something like a budget in 2021? 

Whether you’re trying to build out your emergency savings, planning for retirement, looking to buy a house, or even just need to get your Starbucks habit in check, there is a way. If you’re entering 2021 with more big plans and audacious dreams, then it’s important to make a plan that is flexible and realistic. Making, planning for, and sticking to a budget to reach your financial goals (even in the midst of a global pandemic) is possible.

Ask Yourself Hard Questions

As you start planning make sure to think about what you want financially in 2021 and beyond.  Budgeting and planning for your short-term and long-term financial goals shouldn’t be a daunting task. 


Thinking about what you want in terms of financial goals can be a hard question to ask yourself and potentially a scary question to answer. Start with the big and scary goals and work backwards. So, say your big, can barely imagine it goal is to own a home. Okay cool, now answer some more questions and break that down. What is your current financial situation? What kind of home do you want? Do you have a deadline for this goal? How much would you need to save to realistically be able to pull it off? 


Maybe your goal is to pay off your student loans. How long will that take? Can you pay more to shorten that time? Where can you save? 


Maybe you want to splurge on something nice like a new TV. Or maybe you want to build up an emergency fund. Maybe you just want to get a better hold on your finances.

Whatever your financial goals are, write them down. You’re far more likely to accomplish them if you consistently see them in front of you.


Get Real About Your Financial Goals

Every goal, financial or not, requires you understanding what it will take to get there. Some may have you believe that the new car they just bought took little effort and no pain, but that’s never the case. Getting real about your current financial situation and what your goals entail helps you set realistic and achievable goals.


What It Really Costs To Buy A House

Not everything is as it seems; it’s imperative to understand the costs associated to your end goal so nothing takes you by surprise. New homeowners often say they didn't know about the fees associated with buying a house or didn't fully understand all of their financial options so they pushed their goal of homeownership out further than necessary. Below we break down the costs associated with buying a house that you may or may not have thought about. 


  • Down Payment - As we’ve said before, you don’t need to put down 20% in order to buy a home. That misconception could delay your home buying process by years, and that’s 100% avoidable. Read more about home buying myths here


  • Mortgage Closing Costs - Closing costs consist of most of the costs that go into obtaining a mortgage. This includes fees paid to settlement service providers such as lawyers or closing agents, upfront fees such as mortgage insurance premiums and/or homeowners insurance premiums. 


  • Moving Costs - Are you going to hire a mover? Do you need to buy furniture for your new home? Make sure when you’re thinking about your home-purchase budget, you account for things you need aside from buying the actual home. 


  • Home Maintenance - Buying a house is an incredible way to build wealth but unfortunately things do break now and then. You need to budget for home repairs as they arise.

 

Start Budgeting

No matter what your goals are you must have a plan in place to achieve them. Sit down and write out a budget. Acknowledge every expense you incur monthly, so you know just how much expendable income you have to save towards your financial goals. 


Give yourself two-to-three months to track your monthly expenses and notice patterns. Once you have a better idea of how much is coming in versus how much is going out, and you’ve decided on your goals, it’s time to make your budget. Cut where you can and commit to it. Sticking to a budget is hard. It’s a new habit you aren’t used to and may leave you feeling a bit restricted. Remember, you don’t need to be perfect and it will take some time to get used to. It takes 21-days to establish a habit and 90-days to make it a regular part of your life.


There are many ways to budget and you may need to try several different methods to find the perfect one for you. Looking for a place to start? Download our free budget sheet and quick tips here! 


Once you have a good idea of what your financial goals are and how you'd like to budget for them, let’s work towards them together!

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Buying a home is a huge investment and one we talk about often - BUT the flipside is that you have an opportunity to cash in on that investment when you’re ready to sell your home! While you do have the chance to cash-in, a lot more work goes into selling a home than you might think! If you are considering selling your home, working with a listing agent will help you market your home, negotiate with potential buyers, work through paperwork, and ultimately close on your home! So what is a listing agent? In its most basic terms, a listing agent is a real estate professional who represents the seller in a real estate transaction. The listing agent lists the home for sale and works on behalf of the seller to sell the home at the best price and terms for their client. Listing your home is a BIG deal and it is not a place to try and DIY. But why can’t you just grab a sign at Home Depot and try and sell yourself? Well, there are lots of reasons some of which include: Professional consultation: A listing agent will walk you through each step and tell you what to expect along the way! They should understand the specific community you’re in and the current market environment and will help you determine a competitive but realistic asking price for your home. Marketing and selling your home: Your listing agent will list your home on the multiple listing service (MLS) in order to better market your home to potential buyers. They also can make staging recommendations and hire a photographer to best show off your home and its features. They’ll schedule house showings, and can be present to answer any questions. Communication and negotiation: Communication is key to both buying and selling a home in order to minimize stress and misunderstandings. Listing agents take care of this important task, by staying in touch with interested buyers and their agents, fielding questions, handling paperwork, and negotiating the final sale price and terms. Recommendations: Seasoned listing agents might come with a list of professionals who they have worked with in the past that they enjoy working with in order to make the selling process smoother for you! Some of these professionals include: real estate attorneys or title companies, inspectors, stagers, those who specialize in home improvement AND of course trusted Loan Officers. How do I find the right listing agent for my situation? In order to find the right listing agent for you, make sure your agent is licensed and has experience, references, and a professional website where you can learn more about them and their qualifications. Most real estate agents work with both buyers and sellers, but some might specialize in one or the other. Once you find a few agents through referrals or online research, meet with them in person to ensure they meet your needs and work well with your personality. It is also important to ask questions during your meeting with them and it’s imperative that you determine what you’re looking for in an agent so you make sure you are happy with the product being delivered. Selling a home can be stressful, especially for first-time sellers. A listing agent can help by taking on some of the burden and providing the information and resources needed to help sellers make informed decisions. We work with agents on both sides of the transaction – if you have any questions or would like a recommendation for an agent in your area, please reach out to us!
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