hand puting coins in piggy bank with money stack beside it

8 Ways to be Financially Fabulous in 2021

Every year, we get the same old financial advice—pay off debt, save, invest. In 2021, we’ll cover those basics, plus the mindset issues that are keeping money away so you can be financially fabulous.

If you’re like most people, your list of 2021 resolutions has at least one or more financial goals on it. 

  • Pay off the credit cards
  • Finally, live on a budget
  • Actually, pull together some meaningful savings

Yes, these are all important things. But this year, I’d like to take a more balanced look at our financial lives. As with food, as soon as we feel that our finances are restricted, we spend more and make emotional decisions. But what if our financial lives could be effortlessly fabulous? What if we could spend on things we really wanted (by knowing what we really want) and avoid spending on stuff that doesn’t actually matter? What if strict, repressive budgeting was replaced by a general action plan, with room to maneuver when opportunities arose? What if spending and saving weren’t seen as good and bad behaviors? What if we just saw money as a tool…and our behaviors with money are just how we’re choosing to use that tool? I think that would bring more joy, more wealth, and more happiness with money than the old, guilt-ridden focus on strict budgeting and debt as evil. If every penny of your life goes toward pay for your “past bad behaviors,” there is no joy. And a joyless life won’t lead to greater wealth or financial security. So let’s talk about what does.

  1. Prioritize real joy – What matters most to you? Does traveling bring you more joy than eating out? Does giving to charity fill your bucket more than a new pair of shoes? Or does a high-quality black dress that will last for years leave you feeling more amazing than dropping $250/month on cable?  The key to living in a financially fabulous way is to determine which experiences bring you genuine joy and which are just filler. We’ve all had that experience where we’ve gone into a target and dropped $300 on random items in a manic spree of self-indulgence, only to feel like crap about it a few hours later. There’s no joy in that experience. But planning the family vacation? Guiltlessly buying the designer bag you want? Paying someone to clean the house? Writing that check to a charity that means the world to you? Those are the experiences that lift you; those are the experiences you should prioritize in your spending plan.
  2. Paying yourself first – Saving for short-term needs and long-term retirement is important, yes. But it can also be effortless and not that big a deal. If someone with a retirement plan employs you, have the money deducted from your check tax-deferred. Easy peasy, you’ll never even miss it. Short-term savings just send a specific amount (small, medium, or large) to your savings account with every paycheck. What’s left after that is what goes into your spending plan.
  3. Monthly general spending plan – It’s like a budget, but without the guilt and restrictions. It’s really your projection for the month. You know approximately how much you’ll bring in. Ideally, you’ll have it.  You know how much your fixed expenses—mortgage, utilities, debt payments—will cost. What about those priority joy experiences we just talked about? How much do those 2-4 items cost every month? At this point, you’ve invested in retirement and put a bit into short-term savings, and you’ve planned to spend on the few things that are genuinely important to you. Is there anything left? If not, great! You covered everything important. You can clip the things that no one really cares about. If there is some money left over? See items 6 and 7 for some choices.
  4. Expect shortfalls – Sometimes not as much money comes in as expected. Sometimes, your spending in one category is more than you thought it would be. These aren’t failures: they’re just reality. When there’s a shortfall in your general spending plan, the question is: where do you make up the money?  Your first choice shouldn’t be to cut spending; it should be to make more money. Any economist will tell you that the fastest way to balance a budget is to increase revenue rather than cut expenses. That works on the household level too. Item 5 will tell you more about that. If you’re looking to cut expenses, look at stopping your short-term savings and eliminating half (NOT ALL) of your priority joy experiences. Life without joy isn’t worth paying for.
  5. Generate more income – Whenever I say this, people invariably roll their eyes and make some kind of excuse, “Ugh, you make it sound like it just happens.” Well, it doesn’t just happen. It’s a thing you have to DO. If you’re a teacher, you can take on private tutoring clients. If you’re a professional service provider, you can take on freelance work. If nothing else, you can wait for tables or drive for Uber twice a week and bring in an extra $1,200 per month. It is really not rocket science. It’s simply a matter of deciding to do it and choosing the way to make it happen. But with whatever extra money you do bring in, have a plan for it. If you’re trying to pay off a specific debt, whenever you deposit your tip money or client check, send a payment in that exact amount to the debt immediately. If you’re saving for a priority joy experience, deposit those funds directly into the savings account you’re using.
  6. Pay extra on debt – People have been absolutely scandalized by the fact that I don’t put this first on the list. But no, I don’t believe anyone should suck all the joy out of their lives just to pay off debt. Take care of what is most important and pay off debt with what’s left. I know it’s a controversial stance, but debt crushes people when it’s riddled with guilt and shame. When they’re so full of shame and self-loathing, they just keep spending because they don’t know what’s important. But y’all…It’s. Just. Money. When we create money OR shame associated with spending so much control over our happiness, we’ve doomed ourselves to misery. For some people (like me), it brings me genuine joy to pay off debt and not owe people. It’s one of my priority joy experiences. For others don’t care that much and would rather prioritize other things. This is fine. As long as you can finance the lifestyle you want and save for the future, it doesn’t matter. 
  7. Save for college – If you have a 529 Plan or Federal College Savings Account for your kiddos, it’s a good idea to toss their birthday and holiday money into it. Other than that, whenever there’s a spare chunk of change coming in, pop this into that account. College savings is important, but it isn’t everything. Retirement savings always outranks this…because you can’t take a low-interest federally subsidized loan to pay for your retirement. 
  8. Celebrate your wins – Train your brain to love your financial wins by celebrating. You got to have all of your priority joy experiences, so reward yourself! Did you toss a chunk of money at a debt that’s been bugging you? Celebrate! Every win is worth a pat on the back. Our “normal” response is to berate ourselves for spending too much silently or not saving enough. Does that behavior seem to help anyone? No? Well, then try it my way.

I really believe that the way we look at money is broken. Money is energy that flow to and away from us. By loading it with so much shame, guilt and repression, all we’re doing is pushing it away and driving ourselves to make financial choices we’re not happy with. Do you want to make choices you are happy with? Start by deciding what really matters to you. Make your first choices there. The rest will fall into place.


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