2020… that was a wild ride wasn’t it? Some people were more effected by the events of 2020 than others, but it’s safe to say we all had our world rocked in some way.

As much as I would like to say I’m turning the page on 2020 as we enter this new year, I know that just flipping a calendar page doesn’t mean our world will be different on January 1st.

And you know what? There’s a lot of things we did prior to 2020 that we don’t want to go back to. We learned a lot this year. We made significant progress on our financial goals this year despite the uncertainty and I can attribute that to some important lessons we learned this year.

So I compiled a list of lessons we learned this year, along with a reflection question you can ask yourself if you want to grow in your own finances in 2021.

The importance of building up a savings account

I already knew saving was important and we had a small amount in savings as we were working to get all our debt paid off. That savings would cover a minor car repair, or replacing a broken appliance, but what if one of us was out of work overnight without warning? Thankfully that wasn’t the case for either of us, but back in March when there was so much unknown I was looking at our small savings with a heaviness. What if we needed quick access to cash to get by and our small savings wasn’t enough?

Growing a savings account is more important now than ever before. If 2020 has taught us anything, it’s that we should expect the unexpected.

How different would you feel going into a crisis if you had a large emergency fund vs. little to no savings?

Increasing your income is one of the biggest needle movers

Simplifying this down to one sentence makes it seems obvious, but hear me out. Don’t get so caught up in cutting all your expenses, clipping coupons, and skipping your weekly Starbucks that you forget your income is one of the most powerful tools in your money strategy.

During our really tight financial years I became a master at cutting expenses, mostly out of necessity. I don’t think I could have squeezed another dollar out of our budget. And I was pretty proud of how I creatively made our money work for us during that tight time. However, with my business this year our income increased and I was able to see first hand how that margin made an even bigger impact in our finances. For the first time I was able to take big chunks of money and put them towards debt. I was no longer figuring out what I was cutting out to make sure our bills were paid, but instead was figuring out how much excess we had that month to put towards our financial goals.

If increasing your income is a priority in 2021, what would that look like for you?

Multiple streams of income is a new way of life

It has never been easier to have a side hustle than right now. And by easy I mean accessible to anyone… not that it will be easy to run a business. The gig economy brought endless side hustles from ride sharing to grocery delivery, and this year was the year of online businesses. I took my own business 100% virtual this year, worked significantly less hours and sales were 17% higher than last year.

Practically every household I know now has some kind of side hustle. You no longer need a business degree to start something successful. A Google search and some determination will help you get up and running in most cases.

What am I already doing that I could monetize? (ie I’m crafty so I could open up an online store) If I were to start that side hustle what would my first step be?

Take steps towards self reliance

Hear me out on this one. I mean I live in a gated HOA community so I am by no means a resource for living off the land but I had a wake up call early March this year. We have lived in a way that worked for us for a long time. We bought the food that would last us the week and we would eat practically everything we had and then go back to the store to replenish. Then the world went crazy back in early March and you couldn’t get so many staples. I know I watch too much “The Walking Dead” but I was watching everything going on and mentally preparing myself for the zombies to come next.

We’re not planning on building our own cabin in the woods but we are starting to build up our food supply. We’d also like to start building up more of a supply of other important items like medicines, first aid kit supplies, and tools. And on my list this year as well is to build some garden beds and finally start learning how to grow some of our own fruits and vegetables.

And if all else fails and the world goes totally crazy at least we have some friends that are good at that stuff so we’ll have to form an alliance 🙂

What could I focus on this year that would help me feel like my family was more secure? If there was an emergency today, what would we be lacking and how can I build that up now?

Make a plan but be willing to pivot

I have a theory that the most successful people this year were the ones that were willing to pivot. I know a lot of hard things happened to people this year and I’m not discounting that. But I also know a lot of people who saw what was happening and chose to pivot instead of joining the crowdqua of people complaining about what was happening and that decision lead to great success for them this year in one or more areas of their lives.

I know people who didn’t buy into the narrative that quarantine was going to make them gain weight and got into the best shape of their lives. I know people who started businesses this year with great success despite a lot of other businesses having a hard year. And I know a lot of people who made huge strides in their financial goals this year despite a teetering economy and job loss.

Having a plan going into 2021 is important, but even more important than that is your mindset. Are you willing to make adjustments when life throws a curve ball? Are you willing to zig when the crowd zags?

What is my plan for my money in 2021? What could potentially derail those plans and how could I pivot if that happens?

Believing that 2021 will be a significant year in your journey towards a healthy financial life.

Happy New Year!

<3 Krista

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