Tips for Improving Your Finances in 2021
Barry Bigelow, Lead Advisor at Great Waters Financial, Offers Advice For Improving Your Finances in 2021
DULUTH, Minn. – 2020 has impacted all of us, and the New Year brings an opportunity for a clean slate financially.
Financial professional Barry Bigelow from Great Waters Financial recently spoke with FOX 21’s Brett Scott about ways to improve your finances in 2021.
- Cut Costs Where You Can
Bigelow says one of the biggest money mistakes you can make is spending without knowing it. He encourages clients to take the time to gather up bills from last year. After, carefully look over your itemized receipts and identify what you’re paying for.
“Many people are surprised to learn they are spending money on services they don’t use or don’t even know they have,” said Bigelow. “Look for areas to cut costs, like downgrading your cable subscription. A $5 charge may not seem like a lot on its own, but small fees add up over time.
- Build a 6 Month Emergency Fund
An emergency fund is money you can access at any time to cover unexpected expenses, like a medical bill or home repair. Bigelow says the problem is, more than half of households do not have an emergency savings account, including a majority of people older than 50.
“I recommend my clients have 6 months of expenses saved in their emergency fund. That might sound like a lot, but these goals should be ambitious,” said Bigelow. “Start small by saving $10-$20 a week. Set up an automatic withdrawal from your paycheck into a separate savings account.”
Bigelow has an emergency fund calculator on his website to help you figure out how much you need to set aside.
- Start a 529 Plan
Start contributing to your child’s future education through a 529 plan. A 529 plan is an education savings plan set up by a state or educational institution. Every state now offers at least one plan.
“The money you save won’t be taxed as long as you use it to pay for approved educational expenses, like tuition, fees, books, supplies and room and board,” said Bigelow.”
- Look for Ways to Make Money
From record unemployment to widespread shutdowns and closures, 2020 took a major toll on many people’s financial situations.
If you are entering 2021 with an unstable financial picture, Bigelow suggests you consider starting a side business.
In the last year, many people have turned to everything from driving or delivering for Uber to walking dogs in the neighborhood to make some extra cash.
“Selling items you no longer need or use is another way to make some quick cash. Many companies offer cash for old cell phones or electronics. Reputable services like LetGo are also widely available for those looking to sell used stuff,” said Bigelow.