How to Manage Your Money Better in 2021

How to Manage Your Money Better in 2021

August 04, 2021

Being good with finances is about more than just making ends meet. And when it comes to managing your financial future, there really is no time like the present. 

There are many factors that come into play when managing your finances. Such as changes in tax laws, inflation, increased healthcare costs, job security and more. These uncontrollable and unknowable situations may make you feel powerless. Whatever your feelings about money are, it’s time to take control again. 

*Spoiler alert: Money management doesn’t have to be stressful! If you follow these four steps, you’ll be able to move from financial stress to financial stability.*

1. Start Budgeting

If you are struggling to handle your finances, then you likely need to create a budget—a plan for how to spend your money each month, based on how much you typically earn and spend. A budget is your best tool to change your financial future. To start, write down your income and all your expenses, and then subtract the expenses from the income to determine your discretionary spending. To make this easier, use one of our financial calculators here to discover any problems for discounted cash flows, internal rates of returns, loan formulas, net present value and markup calculations and so on. 

Next, at the start of each month, set up a budget to allocate how discretionary funds get spent. Track the spending over the course of the month, and at the end of the month, determine whether you stuck to the budget. If you spent more than you made, you can fix your budget by cutting unnecessary expenses or, if possible, earning more. Implement the revised budget the next month to start living within your means.

And don't forget, the moments you spend filling the fields in of these calculators will give you a target, so that your financial freedom turns into a real goal. They’re free, they’re simple, and they’re everywhere. All it takes is a few minutes of your time to use one, and see the path you need to take.

2. Maximize your Savings

When it comes to maximizing your savings, the value of high savings rates cannot be overstated. Like the financial markets, life doesn’t usually move in a linear fashion. There will always be setbacks and unexpected hurdles (did someone say COVID!?). So if you’re only saving the bare minimum across your investment and cash accounts, or haven’t invested outside of your 401(k), you may be in a tough spot when things don’t go according to plan. 

Did you know your savings can take a hit if you're not proactively managing your taxes? Understanding tax strategies and managing your tax bill should be part of any sound financial approach. Some taxes can be deferred, and others can be managed through tax-efficient investing. With careful and consistent preparation, you may be able to manage the impact of taxes on your financial efforts.

Lastly, always have an emergency fund. A sudden change in income or an unexpected expense can happen at any time, and you’ll need something to handle these moments. Most financial experts recommend saving three to six months’ worth of expenses in an emergency fund. So in addition to having a regular savings and checking account, you should consider putting your emergency money into a separate savings account. A high-yield savings account in particular can be a great way to take advantage of the earning potential on money you won’t be touching anyway.

3. Pay off your Debt

One of the most expensive mistakes that you can make is to carry a lot of debt, especially high-interest credit card debt into your retirement years. If you want to change your financial picture and gain more financial opportunities, pay off your debt as quickly as possible.

Start by listing all of your current debt, be it credit card debt, student loan debt, or a car loan, and figure out the minimum amount you owe to remain current with each one. Simply paying the minimum amount won't get you out of debt quickly, so evaluate your fixed expenses, and determine how much of your discretionary spending budget you can allocate toward debt repayment.

Try to reduce the interest rate on the debt by asking the issuer for a lower rate, consolidating multiple debts into one, or transferring high-interest debt to a low-interest credit card, such as a balance-transfer card. Then, set up a debt-payment plan, and adopt sound spending habits to pay off the debt as quickly as possible.

Debt management also includes monitoring your student loans. These loans can saddle you with debt for years if you are not proactive about paying them off. Whether you need to refinance or consolidate them, see whether you qualify for a student loan forgiveness program, or add them to your debt-payment plan. Getting control of your student loans is an excellent step to take right now to improve your finances.

You don't have to drastically step up your loan-repayment schedule, either; by paying half your student loan amount every two weeks, you will make a full extra payment every year. Some lenders will even reduce your interest rate by around 0.25% when you sign up to make automatic loan payments.

4. Invest in Your Future

Once these three steps are covered, it’s time to shift your focus to money management for the long term. AKA investing. Investing should be easy – just buy low and sell high – but most of us have trouble following that simple advice. There are principles and strategies that may enable you to put together an investment portfolio that reflects your risk tolerance, time horizon, and goals. Understanding these principles and strategies can help you avoid some of the pitfalls that snare some investors.

You don’t have to figure this out on your own. Connecting with an experienced financial advisor can help you go over your options so that you can feel confident with your investment choices. They'll walk you through the good times and the bad, and help you stay the course or make any necessary adjustments to reach your goals and help your money grow over time.


One of the keys to a sound financial strategy is spending less than you take in, and then finding a way to put your excess to work. A money management approach involves creating budgets to understand and make decisions about where your money is going. It also involves knowing where you may be able to put your excess cash to work.

If knowing how to manage your money is still feeling challenging or you’re feeling ready to take more advanced steps with your money, consider speaking with a financial advisor at Agemy Financial Strategies. While you are the CEO of your financial resources, you can think of us as your CFO, bringing you strategies and ideas designed for YOU in your unique situation, helping you make smarter decisions and letting you focus on enjoying life!

But whether you go it alone or get professional advice, with a little planning and a lot of ongoing discipline, you know now that it’s possible to not only avoid financial hardship but also to paint a bright financial future.

Contact us today for more information on financial planning.