16-Point Financial Checklist for 2021

2021 is officially here, and we are all hopeful it will be better than the last. 2020 might have derailed many of our financial goals, but the silver lining is that it showed us how important it is to financially plan for the future. 

If you haven’t already, get started on your financial checklist for 2021 with these 16 money-making moves. 

#1 Set Financial Goals for 2021

financial checklist for 2021

This comes first on our financial checklist for 2021 because, if you don’t have a plan, chances are, you won’t reach your goals. 

While it may seem impossible to plan in the middle of the pandemic, it’s not. If you haven’t already, sit down and create both short- and long-term goals for this year.  

  • Do you plan on making any big purchases?
  • How much debt do you want to have paid off? 
  • What are your retirement savings, investment, or general savings goals? 

Write it down, and then determine how much money you need to meet each particular goal and the date you want it by. 

For each goal, divide the total amount needed by the number of months until your goal date, and that will give you the amount you need to save each month.  

It does no good to set financial goals and put them in a drawer. Instead, keep them somewhere you will see them. Make sure to review them each month and track your progress. If you fall behind, don’t beat yourself up. Just get back on track as soon as possible. 

#2 Create a Budget and Stick to It 

financial checklist for 2021

Yes, 2020 threw a wrench in many of our finances. But events like last year provide us an important lesson in being prepared for the worst – and not living beyond our means. 

Take some time to review your 2020 budget and evaluate what worked and what didn’t. Review your spending habits and see where you overspent, where you fell short of your financial goals, and where your emergency savings may have lacked. 

Learn from what went wrong in 2020. Then, create a budget for 2021 and schedule time upfront to review at the end of each month so you stay on track

#3 Set Savings Goals and Pay Yourself First 

financial checklist for 2021

If you really want to make 2021 the year you reach your savings goals, you need to pay yourself first. 

When you get paid, before you do anything else (pay bills, buy groceries, or buy anything), contribute to your savings and investments first.

If you have a 401(k), your retirement savings are automatically taken out of each paycheck. If you have an Individual Retirement Account (IRA), you should be paying into this first as well.

Same goes for savings for your emergency fund. Once you’ve put money into this fund, then pay your bills. Whatever is left over is yours to spend however you want. 

If you don’t have much left to spend at the end of a pay period, just remember, you’re building a nest egg for the future. And, should an emergency arise, you’ll be able to pay for it in cash and not have to borrow or put it on a credit card.

[Related Read: 4 Things That May Help Maximize 401(k) Savings in 2021]

#4 Build an Emergency Fund

financial checklist for 2021

If there’s one thing 2020 taught us, it’s the importance of an emergency fund. 

If you don’t have one, now is the time to start funding one. If you have an emergency fund already but it’s not fully funded, put this item on your financial checklist for 2021. 

Experts advise people should save 10-15% of their income.

Let’s say you’re currently saving 8% of your income in your 401(k).  You should take the remaining 2-7% and fund a savings account for emergencies until the account is fully funded. 

If you’re already saving 15% of your income, see if you can put an additional 1%, 5%, or even 10% into your rainy day fund. 

#5 Review Your Credit Score

financial checklist for 2021

Having a good credit score and a healthy credit history is the key to obtaining financing when you need it. Request a copy of your credit report and see where you stand and that the information is accurate. If there are errors, dispute them immediately. 

If you need to improve your credit, make a plan now to build it up in 2021. Don’t wait until you need to borrow money to start making improvements. 

#6 Pay Off As Much Debt As You Can

financial checklist for 2021

Americans are drowning in debt: student loans, credit cards, personal loans, car loans, and expensive mortgages. And 2020 didn’t help the situation. In fact, for many Americans, it amplified it. 

The situation many Americans find themselves in boils down to this: overspending and poor money management

The more you owe, the less you have to pay yourself and save for retirement or fund your emergency savings account. 

No matter the size of your debt, make 2021 the year you make it a priority to get out of debt. 

If you aren’t sure how you can pay down the debt you want with your current income, take on a side hustle. Designate the money you make to go toward your debt. 

[Related Read: Close the Gap on Financial Goals with a Side Hustle]

#7 Get a Retirement Plan in Place or Review Your Current Plan

financial checklist for 2021

This is an important item on our financial checklist for 2021 – and one not to be overlooked. 

If you don’t have a retirement plan, you are probably not going to save enough to retire comfortably. Some people fail to plan for retirement because they don’t think they have enough to even bother with it. Others think it is too late to start saving. And some only plan to let the government take care of them.

No matter your age, you need a plan now so you know exactly how much you need to save to retire comfortably. Without a plan, this won’t happen. Or worse, you’ll end up with so little saved that you might have to struggle to survive.  

That’s why it’s never too early or too late to get clear on when you will retire and how much you’ll need for the lifestyle you desire. The sooner you start, the better your chances are of ending ahead, or at least on track. 

If you don’t already have a plan in place, sit down and write out the answers to these questions: 

    • At what age do you want to retire? 
    • What do you want your retirement to look, feel, and be like? 
    • How much money will you need to have a fulfilling, comfortable retirement? 
    • How much do you need to save right now to ensure you will reach your goal? 

Your answers might change as you near retirement, but answering the above helps get a plan in place. If you’re stuck, seek third-party advice to help craft a plan that will meet your goals and objectives. 

#8 Revisit Your Retirement Contributions 

financial checklist for 2021

Review how much you’re contributing to your 401(k), IRA, or other retirement accounts.  Can you contribute an additional 1%? 3%? 5% each month? It may not seem like much, but every little bit helps. 

If you have a 401(k), at least take full advantage of your employer’s match. Company matching is one of the secrets to maximizing your 401(k). It’s like getting free money. Depending on what your company matches, it may double the amount of what you’re already saving. 

#9 Plan to Maximize Annual Contribution Limits in 2021

financial checklist for 2021

Employee 401(k) contribution limits for 2021 will stay the same as 2020 at $19,500. This applies to 401(k), 403(b), most 457 plans, and the federal Thrift Savings Plan. For those age 50 and older, the 401(k) catch-up contribution is $6,500. 

If you’re 50 or older and need to catch up on your 401(k) retirement savings, the amount you’re able to save remains unchanged at $26,000. If you turn 50 anytime during December of 2021, you’re still eligible to contribute the additional $6,500. 

Individual retirement account contribution limits stay the same for 2021, with a $6,000 maximum contribution limit. This applies to pretax or Roth IRAs. The catch-up contribution for people age 50 and over remains the same additional $1,000.  

When planning your budget for 2021, see what you can do to maximize contribution limits on your 401(k) or other retirement accounts. How much you can realistically contribute to your 401(k) depends on how much you earn and the amount of debt you carry, among other factors. 

Even if it’s a stretch, do what you can to save as close to the contribution limit as possible. Even if this means making cuts in monthly spending. It’s amazing how cutting how much you order off UberEats or mowing your own yard can save each month. 

[Related Read: Retirement Plan Contribution Limits for 2021]

#10 Rebalance Your 401(k) Quarterly

financial checklist for 2021

Next up on our financial checklist for 2021 is to rebalance your 401(k). 
If you aren’t rebalancing your 401(k) account allocations quarterly, you may be missing out on earning more and keeping more of your hard-earned retirement savings. Unmanaged allocations may experience much larger losses in down markets and may miss the opportunity for growth during good markets. 

We recommend rebalancing your account allocations every quarter, or four times a year. This way, you can make the appropriate changes in order to stay on course with your retirement savings goals.

Discover the difference between account rebalancing and asset allocation. Download our guide Why Account Balancing & Allocation May Affect Your 401(k) Performance

#11 Do Something with Your Old 401(k)

financial checklist for 2021

After you leave your job, it’s easy to forget about an old 401(k). If you leave a 401(k) behind with a past employer, it is not their responsibility to take care of it for you. The obvious disadvantage to leaving an old 401(k) behind is that you have multiple accounts to keep up with. But your old 401(k) will remain subject to plan rules, and you will continue to have limited investment options.

Before rolling over an old 401(k) to an IRA or to your current plan, make sure you understand the pros and cons of doing so.

Check out our 5 Costly 401(k) Rollover Pitfalls guide to avoid common – and costly – rollover mistakes.

#12 Max Out Your 2020 IRA Contribution before April 15

financial checklist for 2021

Individual retirement account (IRA) contribution limits are $6,000 for 2020. The catch-up contribution for people age 50 and over is an additional $1,000. You can contribute the maximum for 2020 until April 15, 2021. Do what you can to fully fund your IRA before this deadline. That means making sure contributions are added to your budget. 

#13 Prepare Now for Taxes

financial checklist for 2021

Take advantage of being cooped up at home and spend a weekend preparing your tax paperwork so you’re not stressing come April. Also, if you know you will owe taxes for 2020, make sure you start saving now. Go back to your budget and make sure tax savings are added to it.

#14 Plan to Pay Estimated Taxes Quarterly and On Time

financial checklist for 2021

If you are self-employed, make sure to plan for quarterly tax payments in 2021 due on the following dates:  

  • Quarter 1: April 15, 2021
  • Quarter 2: June 15, 2021
  • Quarter 3: September 15, 2021
  • Quarter 4: January 15, 2022

Also, don’t forget that Quarter 4 estimated taxes for 2020 are due January 15, 2021. 

Make sure you speak with your accountant to ensure you’re on track with estimated taxes and won’t get stuck with a large tax bill come tax time.  

#15 Plan Now to Invest Your Tax Refund

financial checklist for 2021

No matter how large or small your refund is, resist the urge to buy that new TV or use it for a vacation. Instead, invest it in your financial future. 

Whether you invest it in your 401(k), IRA, or use it to fund your emergency savings, every little bit you save now may help you in the future. 

If you add to your 401(k), it needs to go through payroll deduction. Contact your Human Resources department, tell them what you want to invest, and they will take it out of your paycheck(s). Then use your tax refund to live on and make up the difference during this time.

#16 Seek Expert Advice 

financial checklist for 2021

This may come last on the financial checklist for 2021, but it’s an important one. And one that potentially could increase how much money you have saved come retirement. 

David Blanchett, Head of Retirement, CFP, CFA, of Morningstar reported that participants that received expert guidance had as much as 40% more income during retirement versus those who received no Help at all

Just think for a moment how 40% more income at retirement might change your lifestyle later in life. 

Would you be able to help your family more? Be able to spend more time travelling? Buy your dream car?

Chances are, it would make a significant difference. 

It doesn’t matter how much or how little money you have saved for retirement, or how much debt you are carrying, a third-party expert can help you create a plan to get out of debt, fund your emergency account, and maximize your retirement savings. 

 The sooner you reach out for help, the better off you may be. 

 Don’t know where to start? 

Download our no-cost guide: The Different Types of Licenses Financial Advisors Have and What They Mean to You .

 Or, if you have a 401(k), use our calculator to see how professional account management may improve your 401(k) account performance. 

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  1. David Blanchet, Head of Retirement, CFP, CFA, Morningstar 2014, “The Impact of Expert Guidance on Participant Savings and Investment Behaviors”


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