Welcome! My name is Andrew Smigelski, and I help people navigate the world of personal finances! This is a topic that can be very scary for some, but I help my clients make complete and holistic plans so that they can feel more confident moving forward. This is installment one of many future blog posts, about different topics and seasons for the personal finance community. The goal is to educate my readers on topics they are unsure about, or maybe have never heard of before. To start off in 2021, I am going to cover, Five Steps to Get Ahead in 2021.
1. Review 2020: I know, I know. None of us want to remember the year of the pandemic. But there is value in knowing how you did financially in 2020, especially given the circumstances. Take some time to review: How much did you spend on groceries, gas, utilities, phone bill, mortgage/rent, etc. How much did you make? Did you switch jobs? I know it seems silly, but physically writing down and going through where your money goes every month is the first step to financial independence. Once the budget analyzed, that leads to number two….
2. Cut out unnecessary spending: Again, I know, you have heard this all before, right? The reality is, not everyone is honest with their expenses. However, most of us are guilty of this from time to time. I know I picked up some unnecessary things in quarantine – maybe an extra streaming service, more DoorDash, and a LOT more golf, but these are the things that ultimately ruin your budget, because they slip through the cracks. Be quick to catch on to the fact that the key to all of this is discipline.
3. Create a good habit: The old cliché … it takes 21 days of doing something for it to become a habit. Use the month of January. For some reason, saving money for the common American, is one of the bigger struggles. It doesn’t matter the amount you save every month or pay period, what matters is the commitment to do it, and keep doing it. The problem is we start doing something, but then will quit not long after, because we don’t think that it is worth it anymore or making much of a difference.
4. Make your money work for you: Shocking, right? Somebody who works in personal finance talking about investing money! But again, even with as much buzz and talk about this industry that has happened since the start of the pandemic, people aren’t doing it. And before you ask, investing enough money in Robinhood to buy one share of Tesla does not count. This ties into #3, take advantage of compound interest while you can. My favorite is the Roth IRA as a retirement vehicle, because of the tax treatment in retirement. Using some of the money you save every month to make more money… sounds like an ideal scenario to me. It may not be that easy, but starting early and being dedicated to the process can yield some incredible results.
5. Do something you enjoy: Let’s be real, 2020 took a toll on all of us and affected us in different ways. Find something that you love to do, and do it! Doing so could reduce your stress level! For me, 2020 was the year of golf. It is a never-ending quest to fix my swing, and score a little better than the week before. Set some time aside for yourself — you deserve it!
And there it is. I appreciate you making it this far. In all seriousness, the world of personal finance is not an easy one to understand. It can help to sit with someone and just talk through these things, and that is why I am here. Send me an email, or give me a call. A video call works too. Absolutely no cost on your end, just your time. Let’s chat!
The information in this commentary is intended for informational purposes only, and is not intended to imply a recommendation of any products or securities mentioned. Please note that individual situations can vary and you are encouraged to seek such advice from your financial advisor.
Securities and investment advisory services offered through Royal Alliance Associates, Inc. (RAA), member FINRA/SIPC. RAA is separately owned and other entities and/or marketing names, products or services referenced here are independent of RAA.