Three Financial Basics To Practice in 2021

Share Post: facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.

By Jaymon Meikle, Financial Advisor

The year 2020 was many things to different people, but one universal feeling is that it didn’t go how anyone had planned.

Even though we’ve already had a rocky start to 2021, this year brings the hope that the world will go back to something resembling normal as more people are vaccinated.

With the prospect of life getting back to “normal” and lives stabilizing – at least to the level it was before COVID – I wanted to remind everyone to try and focus on the basics when it comes to their finances as we go through this transition. Those three basics include:

1.   Set Up an Emergency Fund (Mental Minimum)

Some of us last year were lucky enough to not lose our jobs or have our wages reduced, but many people did. This is the exact reason why having an emergency fund is so important. No one ever intends to lose their job or for the unexpected expense, but if you had an emergency fund with cash readily available to you, you can cushion the financial blow.

People often ask how much they should have in their emergency fund.

I have personally heard anywhere from six weeks of living expenses up to 12 months of living expenses. Honestly, you could ask 10 different advisors and get 10 different responses.

What I like to ask – an idea from a friend and fellow advisor – is: What is your mental minimum?

Your mental minimum is however much you need readily available so that you can sleep comfortably at night. Whether that’s one month or 18 months of living expenses – it’s up to you and what your preference is.

I would add a caveat that it shouldn’t go below one month, even if you’re fully comfortable with it. You need a small buffer.

2.   Avoid Unnecessary Debt

One thing that I will always give Dave Ramsey credit for is the work that he’s done to help educate people on the risk of debt.

It can be argued that his perspective is a little extreme, but his premise is good: Everyone should avoid all unnecessary debt.

Now, I’m not going to lecture anyone on financing a car or other large purchases because the reality for most people is that we don’t have the cash to buy a car outright. But just because you can squeeze in the monthly payment with the rest of your bills doesn’t mean you should.

Something my wife and I like to do to help dissuade ourselves from using debt, especially credit cards, for a purchase is to add what the interest payment would be on top of the purchase price.

For example, if we were tempted to buy something because it was a really good deal due to it being 10% off but have to use our credit card with a 15% interest charge on it, we would actually be paying 5% over the market price for that item.

If debt has become a problem for you, then I would urge you to read Dave Ramsey’s work. It’s going to be a rough road ahead, but you will get through it if you put in the work!

3.   Stick to a budget

Sticking to a budget will help you establish an emergency fund and avoid unnecessary debt, because you will have a plan for your money. By creating a budget you take control over how much is coming in and how much is going out of your bank account.

Too often people’s “budget” mindset is, “If I have money in my account then I can spend it.” That eventually leads to spending more than they should.

One of the benefits of technology is having access to dozens of free or inexpensive budgeting tools. My wife and I use YNAB (You Need A Budget) which helps us designate where the money is going before we spend it. But there are plenty of other great tools that can be used like Mint or a simple spreadsheet.

The important thing is to have a budget that works for you and is simple to stick with.

There are several other basics to everyone’s financial lives that could use fine-tuning, but these three are ones that I have seen make the biggest impact.

If you would like to talk about your personal situation or anything that is of concern to you, please contact us at 623-869-7222.

Wishing you all the best 2021!



This is not intended to provide specific legal, tax, or other professional advice. For a comprehensive review of your personal situation, always consult with a tax or legal advisor.

facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.
Share Post: facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.


Charitable Giving Strategies in a High-Income Year

Tom Fridrich, JD, CLUⓇ, ChFCⓇ, Senior Wealth Planner  The end of the year offers an ideal opportunity to look both forward and back — reflecting on recent achievements, while setting goals for the upcoming months. For many of my clients, it’s also a time to review their finances and i …

Let’s Talk About Midterm Elections and Your Investments

This week was midterm elections and we’ve had many questions about what it all could mean, which we’ll tackle in today’s blog. We consider it a great honor to vote, and while we may not know the final results of the election for days (or even months), what we do know is the election will …

3 Nontraditional Ways to Give That Still Qualify for a Tax Deduction

Kevin Oleszewski, Senior Wealth Planner ‘Tis the season to give. In fact, 37% of charitable giving occurs during the last quarter of the year — 20% of it in December alone, according to a survey conducted by the Blackbaud Institute. And while the holidays are traditionally a time to reflect …

Considering Tax Loss Harvesting? What You Need to Know First

Kevin Oleszewski, CFP® Senior Wealth Planner As the tax year draws to a close, many high-income investors will look to reposition their portfolios to intentionally generate losses as a way to offset gains — an investment strategy known as tax loss harvesting.
1 2 3 97 98 99

Get in Touch

In just 15 minutes we can get to know your situation, then connect you with an advisor committed to helping you pursue true wealth.

Schedule a Consultation