With 2021 just around the corner, now is the perfect opportunity to start your financial planning. This nine-step plan will guide you in the right direction to help grow your money.

1. Set Goals

Without goals, there’s no way to know what you’re targeting. Using something like Excel, create a list. Start with the three things you consider the most critical, and then work your way down. It’s essential to name your accounts so you can stay on top of them.

Remember, goals vary from one person to another. These include putting money aside for your kids’ college education, saving for retirement, taking your dream vacation, or buying a house. With your list complete, take action that involves meeting with a reputable financial advisor.

2. Look at Your Personal Balance Sheet

As part of this, list all your accounts the way you want them. For instance, if you got married or divorced recently, you might need to update your personal information. Also, review your 401(k), IRA, or other retirement plans to see if you have the correct beneficiaries named.

It’s crucial to focus on paying debt down or completely off going into the new year. With regards to which account to tackle first, start with those that charge the highest interest rates. Although you’ll continue to pay on other debt, focus on getting those paid off by making more than the minimum amount due each month.

If necessary, you can secure a second job to achieve that goal. You can work online, drive for Uber or Lyft, or even babysit, as every extra dollar counts.

3. Work Toward Financial Independence

Find ways to showcase your talents to gain more financial independence. That might consist of going back to school to earn a degree or get a certificate for any number of careers. You can also sit down with your employer to discuss better opportunities within the company, network with community leaders, and even update your LinkedIn account to make yourself more marketable.

You can also be a do-it-your selfer by using financial planning software such as WealthTrace, which allows you to get your arms around your financial and retirement situation. Using this software you can accurately project what your future might look like and what steps you need to meet your financial goals.

4. Credit Protection and Monitoring

Once a year, you’re entitled to receive a free copy of your credit report from all three reporting agencies to include Equifax, TransUnion, and Experian. If a business denies you credit, the agencies will send you a free copy of your report just by requesting it.

If you find any questionable entries or outright errors, you can file a dispute with the credit bureau reporting it either by mail or through its online website. At the same time, you want to monitor your credit. For that, take advantage of the built-in app provided by all the primary credit card companies. Otherwise, you can use a monitoring app found online.

If you don’t think monitoring is important, consider that in 2020 alone, more than 1,500 data breaches occurred. These breaches give cybercriminals the chance to steal your login ID, password, and both personal and financial information.

5. Clean House

That means unsubscribing to online retailers, magazines, subscriptions, and apps that could tempt you to make unnecessary purchases. While “cleaning house,” do some comparison shopping for your cable service, cell phone, and car insurance to see if you can find the same or better coverage but at a lower price.

You could also secure a low-interest credit card or one that offers zero percent interest for a limited time and then transfer your high-interest debt to it. That alone will save you a lot of money. Perhaps one of the more interesting options is to check for your name on your state treasury site and the National Registry of Unclaimed Retirement Benefits. The number of people who have money owed to them without their knowledge is surprising.

6. Establish a Budget

When creating a budget, a lot of people make the same mistake of listing unrealistic goals. The best way to do this is to get all your bills for the past three months together. Then list them in order of priority. That would include your mortgage or rent, healthcare, food, transportation, childcare, and so on.

A great free budgeting tool used by millions is Mint. This online application allows you to import your spending every day and keep track of where your money is going. It’s very easy to use and is known for having a great interface.

Starting with the least important items, reduce or eliminate them. For a while, you might have to make some adjustments and change a few habits. But before long, this will help balance out your income versus debt ratio.

7. Establish a Living Estate or Trust

The time to do this is now while you have the full cognitive ability to do so. This includes naming beneficiaries, having a lawyer set up a Durable Power of Attorney, choosing an advanced healthcare directive, and even organizing all of your digital legal documents. An attorney who specializes in living estates and trusts can help.

8. Consider Life Insurance

You’re never too young or too old to buy life insurance. While this is a vital decision regardless of your situation, it’s especially critical if you have family members who depend on your income. However, if you own a home, automobile, or other assets, including retirement plans, you don’t want to overlook the value of life insurance.

9. Develop a Financial Plan

To reduce your debt, save money, and grow your finances in 2021 and beyond, you’ll need the assistance of a professional financial advisor. That individual can help you set up a working budget and tracking system.

The Bottom Line

Instead of waiting, take care of yourself and your loved ones now. By doing so, you can go into the new year with a sense of confidence about your finances. For sound advice, turn to a trusted financial advisor.