I’m going to share with you five money goals that you should do in 2021 in order to change your life and become rich.
In fact, I myself did these five money goals this year and by doing them, I was able to pay off over $71,000 of debt and increased my net worth by over $100,000 all in one year’s time.
- Increase Income:
- Imagine what you could do and how much faster your wealth and net worth would grow if you were making an extra $1k a month. If you invested that extra $1k each month into the S&P500 for the next 30 years, with a return rate of 7% (which is the historical average rate of return), your investment will grow to over $1 million! You will literally be a millionaire!
- Get Out of High-Interest Debt:
- Paying off debt early is one of the best investments you can ever make. You can literally double your money if you pay off your debt early. Compound interest is a HUGE issue with debt because that interest accumulates more interest, and then that interest accumulates more interest, and pretty soon you find out you’ve paid thousands of dollars even though the amount you owe barely went down. Paying off interest debt is one of the best investments you can ever make and you can literally make money by paying off your debt.
- Save For Retirement:
- The next money goal is important and is sadly ignored by about 50% of the population. Not doing this money goal could leave you unable to pay bills and might even turn you homeless. You will definitely not be a millionaire if you miss out on this money goal and that is save for retirement. Retirement needs to be your top money goal every year because you don’t want to be worrying about how you’ll be keeping a roof over your head and putting food on the table when you’re older and unable to work.
- Increase Credit Score:
- If you don’t focus on increasing your credit score, you risk paying more in interest and not being approved for the loan. A couple of actions I took to increase my credit score and what you can do in order to increase your credit score is to pay on time and decrease credit utilization.
- Plan out Finances:
- Plan out your finances! Budget, spend less money, and make investing a habit. Millionaires plan their financial futures by investing, saving money, and following a budget. You need to make financial planning/budgeting and investing a money goal for 2021. I myself prioritized my own financial planning and that’s how I was able to pay off over $70k of debt and increase my net worth by $100k in one year alone. And I know I’m on track to become a millionaire in 12 years.
I make these personal finance blog so that you could replicate this in your own life so that you could build up wealth and never have to worry about money ever again. Make sure you keep watching until the end because these five money goals will change your life.
The first money goal for 2021 that you should do that will change your life and make you rich is to make more money. Imagine how much faster your wealth and your net worth would grow if you were making an extra $1,000 each month.
If you invested that extra $1,000 each month into the S&P 500 and you do that for 30 years with an annual rate of return of 7%, which is the historical average annual rate of return of the S&P 500, then in 30 years you will literally be a millionaire. There are different ways to increase your income. You could pick up more hours at work, you could start a side hustle of your own, and you could even start a business.
You could blog, you could sell merchandise online, you could even teach online, and hey if you have a hobby that you really enjoy you could find ways to monetize your hobby and make money off of it. People get way too comfortable at their income level.
What was the last time you asked for a raise at your job? And when was the last time you made money outside of your 9-to-5? I bet it’s been a while. And who says you can’t make more money and who says that you can’t double your income? It’s completely possible. The next money goal is an important one and often overlooked because most people don’t do this, which costs them tens of thousands of dollars. By doing this money goal, you could literally make tens and thousands of dollars.
I myself did it this year and made over $40,000 alone and that money goal is paying off high interest debt. Paying off high interest debt early is one of the best money goals that you could ever do. You could literally double your money if you paid off your debt early.
Let’s say your debt was $10,000. Due to compound interest, you may pay more than double what your debt is. Imagine paying $20,000 for a $10,000 debt. That’s insane. Compound interest is a huge issue when it comes to debt because that interest accumulates interest which then accumulates interest and more interest and then pretty soon you’ll realize that you’ve paid tens of thousands of dollars towards your debt but your debt barely went down.
You literally make money when you pay off your debt. Take me for example; I made $44,000 this year just by paying off my private student loans early. I paid a little over $50,000. If I only paid the minimum payment on my private student loan debt for the next 15 years, I would have paid ninety four thousand $94,035.94 , which is completely insane because by paying off my private student loans early.
I literally made $43,490.51 . You know what guys, I get it. Debt payoff is definitely not as exciting as investing and making money. But think of how much money you’ll be making if you were to pay off your debt early. That money that you save could be invested to make more money, to increase your wealth, and then you’re one step closer to becoming a millionaire.
Like I said, this is one of the best investments that you could ever make and if you are in high interest debt right now, then your priority for 2021 should be to pay it all off. The next money goal is arguably the most important one on this list. About 50% of the population do not ever do this money goal and because of that, it leaves them unable to pay bills and sometimes even homeless.
You will definitely not be a millionaire if you miss out on this money goal and that money goal is to save for retirement. It’s shocking to realize about half of American households over the age of 55 have absolutely nothing saved for retirement. I don’t care what age you are right now, whether you’re 30, 40, 60, or 15 years old. No matter what you do, you are going to get older.
Retirement needs to be one of your top money goals for 2021 because when you’re older, you don’t want to worry about keeping a roof over your head or putting food on the table when you’re unable to work. And even though there is social security, it’s still not enough money to cover all of your monthly expenses. In a nutshell, in order to retire, you need about 25 times your annual expenses invested and saved up. Comment down below how much money you need in order to retire.
Let’s say you spend $3,500 each month. That means in order to retire, you will need a little over $1 million invested. You should calculate how much money you need to retire and also calculate how much money you need to save and invest each year in order to retire at whatever age you want to retire at. It’s never too late or too early to save for retirement.
I barely started saving up for retirement this year and I already know how much money I need in order to retire and when I’ll hit that retirement goal. If your company offers a 401k matc, always, ALWAYS contribute up to the match. It’s literally free money. You also want to max out your Roth IRA every year.
Currently, the limit is $6,000. Moving on to the next money goal, if you don’t do this money goal, you risk never becoming a homeowner and you also risk paying more money on items than you should. And that money goal, money goal number four is to increase your credit score.
If you don’t increase your credit score, you risk paying more in interest than you should and you also risk not being approved for loans. People with bad credit scores pay more money in interest because their interest rates are higher than people with good credit scores.
Even if you pay all of your bills on time every month religiously, if you have a bad credit score, you will still be paying more money in interest than someone with a good credit score. That money that you’re paying in interest if you have a bad credit score could be used to invest into the market, to make you more money, to make you rich, to make you become a millionaire.
Having a bad credit score makes you look like such a risk to lenders that they won’t lend you any money. What’s even worse is that you might not even be approved for a mortgage. That might mean that you might never become a homeowner.
There are a couple actions I took this year in order to increase my credit score and if you want to increase your credit score, you should do the following. You should always pay your bills on time. Pay at least the minimum. One late payment can really hurt you and can bring your score down. And if you have multiple late payments, your score will suffer.
Even if you can’t pay the entire payment in full, just always pay the minimum. The next tip is to keep your credit utilization low. This is a percentage of how much credit you’re actually using. If you have a $500 credit limit on your credit card but you’re constantly maxing it out every month and you’re charging $500 worth of expenses on it, then your credit utilization will be 100%.
This makes you look like a risk to lenders. There are two ways to lower your credit utilization. The first way is to increase your credit limit. You could call up your credit card company and ask them to increase the limit on your card or you could apply for more cards.
Applying for more cards will temporarily lower your score a little bit because you’re getting more credit cards. In the long run, you’ll be better off because your credit utilization will be lower. The second way to lower your credit utilization is by spending less money.
Don’t max out any of your credit cards and try to spend less than 10% on each card. If you do this, your credit score will increase, you’ll pay less in interest, and you’ll also be approved for better rates. The last money goal is what made 80% of millionaires become millionaires and grow their net worth to $1 million or more. In fact, if you don’t do this money goal, you will never become a millionaire and if you don’t do this money goal, then you will fail at the rest of the money goals that were mentioned in this blog leading you to financial misery.
And that money goal is planning out your finances by budgeting and investing your money. Millionaires plan out their financial futures by saving money, investing money, and following a budget. Millionaires allocate twice the amount of hours per month to planning their financial investments than those who never accumulate wealth.
On average, millionaires invest roughly 20% of their income and save 15% of their income. If you want to be a millionaire, you should probably be investing at least 20% of your income. And even after they reach a net worth of $1 million, millionaires still follow a strict budget.
They know exactly how much money they’re spending each year on food, clothing, and living expenses. Okay, be honest, do you know exactly how much money you’re spending each year on each spending category? If not, maybe that’s why you’re not a millionaire.
But don’t worry! There is still time to change your habits and be on track to being worth over a million dollars! The first thing you need to do is you need to like this blog. The second thing you need to do is you need to make financial planning, budgeting, and investing a money goal and top priority for 2021.
I myself prioritize my own financial planning and that’s how I was able to pay off over $71,000 of debt and increase my net worth by over $100,000 all in one year’s time. And I know that I’m on track to becoming a millionaire in less than 12 years.
Couple things I did this year that you need to do in 2021! I started budgeting. This allowed me to see exactly where my money was going and exactly what categories I was overspending in. Budgeting might be a little difficult to start. I know a lot of people have anxiety with their finances because that’s how I was. I had so much anxiety about my finances.
However, once you start, it’s easy to keep going and keep the ball rolling. And you’ll feel much better about your finances. Next, just like millionaires, I prioritized saving my money and investing my money. I started doing this earlier this year once I was able to pay off my high interest student loan debt.
I made a helpful blog on how I’m able to save 50% of my income. The link is in the description below. By doing these five money goals in 2021, you’ll be setting yourself up for financial success in the future. If you make these money goals a habit, you’ll be closer to becoming a millionaire, you’ll reach financial independence, and your net worth should grow exponentially.