Bobservations: Top 5 Financial Tips for 2021

Finally, it’s the end of 2020! Like so many of you, all I want is for this year to be over and for 2021 to usher in something different, something better. Yet, none of us really know what the future holds, that’s why it is so important to put our trust in the One who holds the future. But that doesn’t give us an exemption from learning, planning, preparing, and taking action. If you found yourself struggling financially in 2020, odds are that flipping the calendar alone isn’t going to make much difference. As we all begin a new year filled with hope and promise of something better, let’s do more than just wish. Let’s learn, plan, prepare, and take action. With that in mind, here are my top 5 financial tips for a better 2021.

1. Budget

If you have been reading these posts for any length of time, you knew this would be on the top of the list. That’s because I believe it is the foundation to gaining control over your money. Proverbs 21:5 instructs us that, “The plans of the diligent lead to profit as surely as haste leads to poverty.” Without a budget, at the end of each month you will always be wondering where your money went. With a budget, you have all the power. You get to tell your money where to go BEFORE you spend a single dollar. If you have never put a budget together, you may find that it is easier than you think, just use this link to Dave Ramsey’s website, it will walk you through the process.

2. Get Out of Debt and Stay Out of Debt

An obvious side-effect of the various “stay at home” orders, was that most of us were at home – a lot. I bet it wasn’t long before you started to notice all the things around the house that need to be repaired, upgraded, or replaced. But was it in the budget? Any time you use a credit card or secure a loan, it is putting you further into debt. In Romans 13:8 the Apostle Paul tell us, “Owe no one anything, except to love each other, for the one who loves another has fulfilled the law.” Don’t believe the lies we tell ourselves like, “you work hard, you deserve it.” When you can pay for it, then you deserve it. Imagine what you could do if you didn’t have debt. Think of how much extra money you would have each month and the good you could do with it. The best way to get out of debt and stay out of debt is to use the debt snowball. Again, Dave Ramsey has an easy-to-follow way get started. If you are ready to eliminate your debt once and for all, click here.

3. Build an Emergency Fund

If 2020 has taught us anything, it’s that anything can happen. Now that we know, we need to be prepared. This pandemic has gone on so much longer than most of us thought, and it’s still not over. In Proverbs 13:16, the author tells us, “Every prudent man acts with knowledge, but a fool flaunts his folly.” Having an emergency fund is prudent, because emergencies happen. Once you are out of debt, take every bit of the money that was put toward getting out of debt and put it toward building a 3- to 6-month emergency fund. Imagine the peace of knowing if you were to get laid-off you have time to find your next position, or if your car breaks down you have the funds to repair it – without going further into debt. This is not a substitute for putting our trust in God, it’s simply being prudent in the way we manage the resources He has entrusted to us.

4. Plan for Retirement

If your plan is to have the Government take care of you financially (think social security) when it’s time to retire, then you will most likely live out your golden years under-resourced. All of the COVID relief acts have only strengthened my position, the government is not here to take care of all its citizens financially. It’s your future, you need to act like it is up to you. Once you are creating your budget every month, have completely eliminated your debt, and have built a 3- to 6-month emergency fund, it’s time to get serious about investing for your retirement. To get more insight into my thoughts on retirement planning, you can read this post from April 2018.

5. Be Generous

Before you tune this one out, it’s not only about money. In the gospel of Luke, Jesus said in verses 37-38, “Judge not, and you will not be judged; condemn not, and you will not be condemned; forgive, and you will be forgiven; give, and it will be given to you. Good measure, pressed down, shaken together, running over, will be put into your lap. For with the measure you use it will be measured back to you.” It seems that Jesus is saying that when we are non-judgmental, non-condemning, forgiving followers of His, we are being generous to others. 2020 created so many opportunities for us to share our thoughts (in some cases our every thought) on social media. Were those posts generous in nature? If you are a Christ follower, did they accurately reflect Jesus? Let’s work hard in 2021 to take our thoughts captive and be generous – even to those who think different, look different, act different, and even hold different values.

At this time of the year, I like to wish people a Happy New Year with this saying I picked up from my father-in-law, “may the best day of 2020 be your worst in 2021”.