15 Financial Goals Everyone Should Have To Recover In 2021

Financial goals everyone should have

Setting financial goals will give you direction

Anybody else happy to see 2020 come to an end?

It’s been a tough year, that’s for sure.  Some of us might even be crawling across the finish line on New Year’s Eve, because life has really handed out a beating the past several months.

I think 2021 is going to be an awesome year.  I think the economy is going to bounce back, and everyone is going to be so vaccine-happy that there’s going to be a nationwide party going on.

Restaurants are going to be full, salons will be booked for months, and people will be going shopping like it’s 1999.  Stores will need to hold job fairs and go on hiring sprees.  Those who’ve been unemployed (or barely employed) for months will suddenly have a surplus of income and be able to save for the first time in a long time.

It’s going to be great.

Of course, I don’t know for certain.  But, it’s what I hope for and choose to believe.  So, I want to be prepared, and I want you to be prepared, too.

Having financial goals is a great way to start planning for a prosperous 2021.  After all, goals give you a direction and a destination.  If you’re going to get the most out of the new year, you need to know where you’re going.

Don’t let your current circumstances trick you into thinking you’re stuck in an impossible situation.  You’re not!  You can take steps, however small, to improve your finances and recover from any damage done so far.

To help you, I’ve put together this list of 15 financial goals everyone should have to get back on track in 2021.

1. Rebuild (or start) your emergency fund

Emergency fund jar

If you experienced a job loss, pay decrease, or cut in hours, you may have had to dip in to your emergency fund to tie you over.

That’s what an emergency fund is for!

However, it’s critical that you replace whatever money you had to spend.  You need to get that balance back up to a fully-funded level.

When your work situation improves, and your income has returned to normal, be diligent about adding savings to your emergency fund until it can cover 3 to 6 months of expenses.

Nobody could have guessed last December that we would be going through a worldwide pandemic right now, and yet, here we are.  As of the date of this post, the U.S. unemployment rate has almost doubled since a year ago!

As much as I want to hope in a brighter 2021, we all know that our circumstances can turn on a dime.

So, be prepared for whatever life brings your way by having a fully-funded emergency savings account.

And, if you haven’t started an emergency fund account yet, get started now!

Knowing you have savings to carry you through 3 to 6 months of financial hardship will give you a sense of peace and confidence that your situation won’t turn into a financial disaster.

2. Reassess (or start) your monthly budget

When my husband and I both lost our incomes back in April, I had to quickly adjust our budget.

Woman budgeting

I paused any optional payments and contributions, and cut every expense corner to maximize our savings and unemployment income.

We didn’t know how long this trial would last, but I was committed to a tight budget from day one.  I wasn’t taking any chances.  But, once our income gets stable, I’ll need to adjust our budget again.

If you’ve had to pause some bills, defer payments, or stop contributions, then a budget reassessment will be necessary once your financial situation improves.

However, I encourage you to take those frugal lessons you’ve learned this year and apply them to your 2021 budget.

Hopefully, you’ve realized that you *can* live on less, that you *are* capable of cutting your food bill, and that you *don’t* need a new outfit every month.

Consider, instead, applying more to your retirement account.  Or, paying down your debt (which I’ll address below).

Don’t let your spending plan just be a tool to determine how much you can budget for extra shopping.

Let your monthly budget reflect and support your long-term financial goals.

And, if you haven’t started a budget – create one today!  A budget is a tool that helps you control how your income is being spent.

Having a spending plan that you’re committed to will be a critical factor in reaching your financial goals.

3. Get aggressive with debt payoff

Debt jar with clock

If you’ve had to defer debt payments or just cover the minimum required, then you’ve lost some ground in your debt payoff plan.  This might discourage you, so just remind yourself that it was through no fault of your own.

The whole world was thrown into a tailspin, and we all had to do what needed to be done just to get by!

So, don’t be overly concerned with paying off debt until your financial situation has stabilized.  If you’re unemployed, furloughed, or your income has been cut substantially, just focus on conserving money right now.

Then, when your circumstances improve and get back to a normal level, start crushing your debt with every extra penny you have.

If you had a debt payoff plan that you needed to pause, then jump back into it with all the perseverance you can muster.  Recommit to the goals you created before this whole pandemic started.

You can even decide to be *more* aggressive with paying down your debt, once your income recovers.

After you reassess your budget, you can start applying more cash to your credit card bills.  Create a new timeline and and have a new vision for achieving debt freedom.

This might be a challenge, after applying only minimum payments for so long.  You might also experience a residual uncertainty about your financial future.

But, I encourage you to stay focused on your goals.  Don’t let the unknown hold you back.  If you keep moving forward with your financial plan, you’ll be prepared for whatever comes your way.

Related Post:  How To Escape Debt With A DIY Debt Management Plan

4.  Get a side hustle

As more jobs open up and opportunities become available, creating more income streams can help you boost your financial recovery efforts.

Dog walker

You could choose to find a low-key, part-time job on the weekends, or offer a freelance service that you enjoy doing.  Creating this extra cash flow will provide more money to pay off debt, build your emergency fund, and increase financial security.

These days there are countless ways to make more money, both offline and online. You just have to find something you’re skilled in or motivated to learn.

Determine how much extra income you want to generate, based on the difference between what your current budget provides and what you want to accomplish.  Then, look for side gigs that can provide this amount within the number of hours you can commit to.

Also, think about your long-term financial goals, and what type of income streams you can create that aren’t fast money-makers.  Starting up a blog or a small online business take time to build, but have the potential to generate a full-time income if you stick with it.

5. Maximize your retirement contributions

Retirement fund blocks

If you’re like most who read this blog, you’ve passed the 50-yard line and retirement is on the horizon.

That means you have the advantage of making catch-up contributions to your retirement funds.  And, you might really need to play catch up in 2021.

We had to stop all contributions to our 401(k) since April.  And, since my husband was furloughed, we were also missing out on matching funds from his employer.

You might be in the same boat.  According to the a recent extensive study by Edelman Financial Engines:

  • half of U.S. employees said they took action that was detrimental to their long-term financial security due to the pandemic, which was a 50% increase since April
  • 45% of these actions directly harmed their retirement accounts, such as changing portfolio allocations, reducing contributions, and borrowing from their funds
  • 30% of these actions increased their debt
  • 21% of these actions reduced or depleted their emergency savings

The increase in these statistics was partially due to the passing of the CARES Act, which made borrowing or withdrawing from a 401(k) or IRA easier and less costly.  For those who were struggling to make ends meet, this seemed like a viable option to stay afloat.

If you took out a loan or early withdrawal, you’ll want to boost your retirement savings as your income improves. For some, it may take years to make up for what’s been lost.  For others, it might mean delaying your retirement altogether.

The important goal is to maximize your efforts to increase your retirement savings after you’ve stabilized your income.  The sooner you can increase the returns of compound interest, the better off you’ll be.

6. Improve your money mindset

Getting laid off and living on unemployment can really do a number on your money mindset.  A scarcity mentality kicks in and your hoarding tendencies can take over.  (Can anyone say toilet paper?)

New mindset New results

When your thoughts around money come from a place of lack, you’ll struggle with the limiting belief that you’ll never have enough.  And, once your mind is set on a belief – whether helpful or harmful – you can get stuck in a perspective that only sees what supports that belief.

So, if you’ve been living on less and squirreling away every penny so you can get through this horrible nightmare, your thoughts around money may have also suffered.

You may feel a little cynical or pessimistic about the future, the opportunities available to you, or your ability to overcome this setback and come back stronger.

You might even be scared or feel hopeless that you’ll ever get out of debt or retire on time.

It’s okay to be scared.  But, you can’t let fear hold you back from your dreams.  Every aspiration you had before the world turned upside down is still possible for you to achieve.

Your path to success may look different than you anticipated. That doesn’t matter, because the only step you need to be concerned about is the next one.

Spend some time reflecting on your thoughts towards money:

  • Do you believe you have just as much capability as anyone else to achieve financial freedom?
  • Do you accept that you have opportunities all around you to increase your income?
  • Do you have confidence that achieving your financial goals is inevitable, as long as you keep trying?

Your results begin with your thoughts.  Make sure your mindset is positive, healthy, abundant, and confident.

With the right mindset, anything is possible.

Related Post:  How To Change Your Mindset And Achieve Your Goals

7. Live below your means

Woman reading in hammock

One thing 2020 taught us is that our perceived financial security can be jeopardized overnight.

Charging up credit cards and spending money you don’t have yet can actually be a lot riskier than you thought.  Turns out you *can* lose that reliable income you’ve had for 20 years in the blink of an eye.

I know.  It happened to us.

We had to cut expenses and stop any frivolous spending immediately.  It’s amazing how a little pressure can force you into better habits so quickly.

If you’ve had to do the same (or similar), then you’ve learned a very important lesson:  you *can* live on less!

But, the true test will be how you use this knowledge when your finances improve, your budget isn’t so tight, you’re back to work, and your bank account is full.

Don’t let the temptation to “treat yo’ self” pull you back into a lifestyle that’s beyond your means.  Set boundaries for yourself that provide a cushion between you and life’s curveballs.

When you’re not spending everything (or more) than you make, then your income can cover your current expenses as well as your future goals.

You’ll have enough to build an emergency fund, pay down debt, or invest in a retirement account.

Living within your means today is one way of taking care of your future self.

And, if your budget is so stretched that every dollar is already working overtime, then it’s time to make a change.

Get a second job, create another income stream, downsize your lifestyle, and make the sacrifices necessary to increase your financial security.

8. Track your net worth

Your net worth is like your overall grade for every financial assignment you’ve ever been given.  It reflects all the ones you passed, failed, missed, and retook in your entire life.

Tracking net worth

And, because you face financial decisions on a daily basis, it’s always changing.

Tracking your net worth is a financial habit that gives you a bird’s eye view of your overall financial progress.  This one number will tell you how close or far away you are from reaching the level of financial freedom you want.

Even though your net worth will fluctuate over time, you want to see it increasing more than decreasing.

An increasing net worth is a sign of good financial health.  It means debt is decreasing, assets are increasing, or a combination of both.

If you’ve never calculated your net worth before, now is a good time to start.  It’s possible your net worth has declined recently, due to the extreme circumstances we’ve all been living through this year.

Use your net worth number to guide you in your future financial decisions.  Maybe you’ll need to really focus on paying down debt, or boosting your investment accounts.

Tracking your net worth on an annual basis will help you stay on track with your financial goals.

9. Improve your credit score

Credit report

Hopefully 2020 didn’t do too much damage to your credit.  But, if you were like many others that struggled to get their bills covered, it’s possible your score has slipped.

The good news is, there are steps you can take to boost your score.  The not-so-good news is that it’s a long-term goal that takes consistency and time.

You can check both your credit score and credit report for free.  (They are not the same, but each reflects the information of the other.)

Go to a credit scoring site like Credit Karma to access your score.  There are various scoring models, but generally your score will fall into one of these categories:

  • 800+:  Excellent
  • 740 – 799:  Very good
  • 670 – 739:  Good
  • 580 – 669:  Fair
  • 579 or lower:  Poor

Once you know your score, download a free credit report from AnnualCreditReport.com(Because of the COVID crisis, you are able to access free weekly online reports through April 2021!)

Your credit report will list your bill payment history, loans, debt, and any other financial information that’s impacting your score.  It’s important to check your report for errors and inaccuracies.

With this information, you can start improving your credit score.

Two of the most effective actions you can take to boost your score are:

  1. Pay off a large percentage of a loan balance
  2. Make consistent, on-time payments to your debt balances that are greater than the minimum

As you lower your debt and build a positive repayment track record, your score will start to climb.

Related Post:  9 Smart Reasons To Check Your Credit Report

10. Uplevel your skill set

I’d never heard the term “essential worker” before this year.  I’d certainly never let that term guide my career decisions.

Woman taking online class

But, in 2020, this phrase essentially defined who would have a reliable income, and who would not.  Unless you had a thriving online business or were independently wealthy, if you weren’t an essential worker then your livelihood was uncertain.

That’s why leveling up your skills and expanding your professional horizons should be on your 2021 goal list.

Seek out opportunities to improve your skills in your current job.  Take extra training, find a mentor, sign up for online classes.

Take the initiative to learn more and get better at what you do.  This helps with job security and puts you in a better position to get raises and promotions.

You can also learn something completely new.  The internet has made education so accessible, you could learn anything you’re interested in.

You’ll open yourself up to and prepare yourself for what’s possible, as you continue to grow in your knowledge and abilities.

It’s a great way to improve your financial situation, increase your income, and even start a side business of your own.

11.  Refinance your mortgage

Small paper house with keys

Back in June, my husband and I called our mortgage consultant to discuss a refinance, because rates had dropped to all-time lows and my in-laws had offered to pay closing costs.

About an hour into a conversation about rates and payments and options, the consultant told us we wouldn’t qualify since my husband had been furloughed.


Talk about a let down. (Especially since I had shared this info with him in a prior email.)

If you’ve endured a similar situation, all hope is not lost.  As of the date of this post, rates are still low and the forecast is favorable for 2021.

When your employment situation stabilizes, you could potentially save hundreds every month if you can qualify for a refinanced loan.

Add this financial goal to your list, and circle back to it when you’re in a position to refinance at a lower rate.

12. Make a will

This year, like no other I’ve experienced, elevated the fragility of life.  Even as I write this, a childhood friend is fighting for his life after getting this devastating virus that’s taken so many lives in such a short amount of time.

Multigenerational family

This moment in history, though full of difficulty and despair, can put life into a different perspective.  It’s our chance to fully grasp how each day is so precious, and nobody is promised tomorrow.

If you haven’t done so yet, make 2021 your year to get your affairs in order. 

You may have 40 years left, or 40 hours.  So, do what you can today to make life easier once you’re gone.

Making a will is actually one of the most loving things your can do for you family.  It gives clear directions at a time of great sorrow and loss. You can save your grieving loved ones much trouble, stress, and expense just by taking the time to put your wishes in writing.

Creating a will is a simple process, but you must take specific steps to ensure it’s accurate, complete, and valid:

  1. Decide what you’ll include in your will.
  2. Be specific about who gets what.
  3. Assign your beneficiaries to various assets.
  4. Name an executor to oversee the execution of your will.
  5. Name guardians for your minor children.
  6. Sign your will and get it notarized.

Once your will is complete and valid, be sure to let the people in your will know what to expect. The last thing you want is for disappointments and hurt feelings to divide your family after you’re gone.

Keep your will in a safe place, along with all of your other end-of-life documents.  A waterproof and fireproof safe is ideal, just make sure you let someone know the combination!

Lastly, review your will once a year to make sure it still reflects your current circumstances.  Life is ever evolving, relationships change, and loved ones may pass before you.

Related Post:  What Happens If You Don’t Have A Living Trust?

13. Get organized

Woman filing

I was recently griping to my teenage son how I much I dislike grocery shopping in a store I don’t normally shop in.  I don’t know where anything is, and I usually have to make 3 trips through the entire store to find everything I’m looking for.  I don’t even like grocery shopping, and to prolong the experience is such a drag.

When you can’t find what you’re looking for, you waste time and energy.  And, as your time and energy diminishes, so does your patience and motivation. This applies to every area of your life, including finances.

Getting your finances organized is absolutely critical to meeting your long-term goals.  Create a system that saves you time, energy, and focus, and you’ll make progress so much faster.

An organized, financial system could include:

  • A written budget that is easily accessible and simple to update
  • A folder to keep receipts, bills, and invoices
  • A journal or online document where you write down and review your goals
  • A debt payoff tracker that keeps you informed of your progress and gives you motivation
  • A financial app that gives you a wide-angle view of your financial health
  • A legacy drawer where you store important financial and end-of-life documents
  • A cabinet to file paperwork for credit cards, insurance policies, retirement funds, mortgage, etc.

When you have a place for everything, and everything in its place, you’ll be more likely to get those things done that move you forward toward your goals.

14.  Write down a 5-year plan

I want you to close your eyes.  Then, imagine your life 5 years from now.


What are you doing?  Where will you be?  What is your life like?  Are you happy and fulfilled?  How are your relationships?

These are all answers you can decide on today.  *You* can create a plan now to create the life you want, 5 years in the future.

It starts with a vision, gets focused with a plan, and comes into reality through action.

Most people will only imagine what their life could be like.  But, they won’t actually take steps to make it happen.

If you’ve never written one, make it a 2021 goal to write out a 5-year plan for your life.  Make sure you’re specific, so you can be sure you get to where you want to be.

Include every area of your life that you want to improve, including:

  • Finances & career
  • Family & relationships
  • Health & fitness
  • Spiritual & self-care
  • Hobbies & recreation
  • Personal growth & education

When you plan your future *from* your future, you set up your future self for a successful, awesome life.

The amazing author Donald Miller once said, “fate is a terrible writer“.  Don’t just hope for your dreams to come true.  Don’t leave your life up to fate.

Write down your goals, create a plan, and start setting your actions in motion to achieve the life you really want.

15.  Read the top personal finance books

Woman reading a book

If you do a search for “top personal finance books”, you’ll get a lot of opinions from different bloggers.

Some classic personal finance books that are on just about every list are:

  • Think and Grow Rich by Napoleon Hill
  • The Millionaire Next Door by Thomas J. Stanley
  • Total Money Makeover by Dave Ramsey
  • Rich Dad Poor Dad by Robert Kiyosaki
  • The Automatic Millionaire by David Bach
  • Your Money or Your Life by Dominguez, Tilfor, and Robin

If you don’t like to read, download the audio version.  If you’re short on spending money, check out books from your local library.

Personal finance is easier than ever to learn about and master.  With books, videos, podcasts, and blogs, you can learn how to be a master of your money management and make wise financial decisions.

Make a goal to read (at least) one personal finance book a month in 2021.  By the end of the year, you’ll be smarter and more confident in your financial decisions.

Related Post:  21 FREE Online Personal Finance Courses

Having goals will help you recover and come back stronger

Goals give you direction.  They give you a purpose for your decisions, and a hope for your future.  They remind you what’s possible.

Maybe 2020 was extremely tough on you financially, physically, emotionally, mentally.  I believe, in the end, everybody suffered a loss to some degree.  The pandemic connected us all together through struggle, hardship, and pain.

We learned some tough lessons and endured some painful consequences.  We walked through the valley together.

But, the mountaintop is just up ahead.  Some will choose to climb, despite their weariness.  Others will stay in the valley.

What will you choose?

I encourage you to take a step forward.  Use this list of goals to inspire you toward those dreams you’ve had to shelve for a while.

Start with building up your emergency fund.  One dollar at a time.
Review your budget and make any necessary adjustments.
Pay a little extra toward your credit card bill.
Increase your retirement contributions by 1%.
Learn a new skill, check your credit score, read a book.

Each small step gets you closer to the mountaintop.

The important thing is to start being purposeful about your financial goals – whether they’re on this list or not.  This means writing them down, planning them out, and taking action.

Financial freedom is possible, even if you’ve waited until your 50s to get started.  Even if a worldwide pandemic set you back a few steps.

Remember: the only reason you’ll fail is if you give up.

So, make 2021 the year when you came back stronger, better, tougher, and more committed to your goals than you’ve ever been.

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15 Financial Goals Everyone Should Have To Recover In 2021

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