Money Goals to Create Wealth in 2021

It’s that time of year!  The slate is wiped clean and it’s time for a new set of goals.  

But first, confession time: The year 2020 was the first year that Mr. C and I set any formal financial goals for our family.  Sad, irresponsible, financially immature?  Check, check, and check. 

And exactly how did it go, you ask?  Well, the results were very….surprising.  That’s the word I would use.  Surprising.

Some predictable things happened too.  We definitely made better progress with our money than we would have without the goals. We prioritized our 403(b) savings as well as made HUGE progress on our debt (specifically the mortgage on our rental property).

But something big happened to me that I wasn’t expecting: I shed some serious guilt about fun and frivolous purchases. You see, we had already sat down and made a plan for the financially responsible aspects of our budget.  We were accomplishing our financial goals. The money we assigned to the “fun” category was there to do a job–create fun!  And I started to be okay with that. 

In theory, I have always totally agreed that money is a tool to help one create a full and rewarding life.  But I have always struggled to put it into practice. I never enjoyed the things money could buy because I always had serious guilt about spending money.  My emotions told me that money should only be used for the essential and responsible things like paying off debt or saving for retirement.  Otherwise, it was wasted.  While this attitude has helped me be a stay-at-home mom to five, it has also come with an emotional cost. Thankfully Mr. C is a very patient person.  But I could tell it was time for a change.

When we sat down to make goals in 2020, I reluctantly agreed to add some fun money into the mix. It turned out to be a good decision for everyone. 

Other people may have different circumstances.  When I worked in the mortgage industry, I saw that most people were decidedly in the opposite camp.  There was credit card debt, late payments, department store cards with maxed-out balances, and car loans that made my eyes bug out.

Whichever side of the spectrum you happened to be on, spending too little or spending too much, I am now convinced that a good set of financial goals is a great tool to living intentionally.

That’s why I am excited for a new year that brings a new set of goals to our family.

Many are the same or similar to last year, and a few are totally new.

Here is what we hope to accomplish in 2021:

1. Use YNAB to track every dollar.
2. Max out both Roth IRAs.
3. Increase yearly 403(b) contributions from $16,500 to $19,000.
4. Pay off our rental property’s mortgage.
5. Utilize our FSA (flexible savings account) and pay all out-of-pocket medical expenses with pre-tax dollars.
6. Pay down our car loan to $10,000.
7. Fund a five-week trip to Alaska for all SEVEN people in our family.
8. Make a will.
9. Update beneficiaries on all accounts.

We actually wouldn’t be surprised if we aren’t able to meet each and every goal.  Last year we did better overall than we thought we would despite our income dropping lower than expected. So we thought, hey, why not stretch ourselves and shoot a little high?

So, which ones should be easy and which are more optimistic?

Goal #1: Use YNAB to track every dollar.

This one should be easy. After getting a rocky start with it last year we ended strong and have really seen the benefits of using YNAB.  

 Goal #2: Max out both Roth IRAs.

Easy.  We have been doing this for several years.  There should be no reason this year would be any different.

Goal #3: Increase yearly 403(b) contributions from $16,500 to $19,000.

Now things start to get a little less certain.  We don’t really know what income to anticipate.  Enrollment in community colleges has been hit really hard the last little while. If classes get canceled, that is income that, more or less, gets canceled for us as well. 

To top it off, we have our oldest turning 16 this year.  That means a teenage driver, and teenage drivers mean high insurance and keeping a beater car around for the teenager to abuse.  We will see…

Goal #4: Pay off our rental property’s mortgage.

We think we can do this.  There is almost $19,000 left on the mortgage, and we were able to pay over $21,000 last year.  In addition, we just bought a plug-in hybrid electric car at the end of 2020 and have some associated rebates coming our way.  We plan to prioritize this mortgage over paying off the car loan.

Goal #5: Utilize our FSA (flexible savings account) and pay all out of pocket medical expenses with pre-tax dollars.

We are determined to make use of this in 2021.  We kept forgetting last year.  Luckily the plan gives us extra time to use last year’s fund. Hopefully, everything works out better this year.

Goal #6: Pay down our car loan to $10,000.

This is probably the biggest question mark in our goals and the least likely to succeed. It’s also the lowest priority.  We start the new year with the car loan sitting above $23,300.  It will take an additional $13,300 to make this work. So, if something has to give, this will be the one.

Goal #7: Fund a five-week trip to Alaska for all SEVEN people in our family.

Non-negotiable is this trip, and that’s where being intentional with our money comes in. It’s important to us, and it’s important to our family members who live there that we make the trip.  We are scrimping on things that don’t matter as much to take a trip that does.

Goal #8: Make a will.

I don’t know about Mr. C, but I’ll admit it.  I am embarrassed this needs a spot on the list.  It would be okay if it read “update our will.”  But, no, it is “make a will.”  What kind of parents don’t have a will?  The irresponsible kind, that’s for sure.  We will be irresponsible no longer.    

Goal #9: Update beneficiaries on all accounts.

This didn’t hit our radar until we started thinking of a will.  We need to make sure our money makes it to the right people if something happens to either of us. 

That’s a wrap.

That’s what we came up with for 2021.  We are really hoping that each of these goals can get checked off, and we have all good news when we do a final review this time next year.  

We know setbacks can and eventually will happen, even if it’s not this year.

If our goals need a little revising when we come to the end of the year, that will be alright as long as we took our best shot. 

What do your goals look like? Are there some that are similar to ours? What goals do you have that are different?