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Tips for improving your personal finances in 2021

Start with small steps and don’t be afraid to ask for advice from professionals.
Credit: Andrey Popov - stock.adobe.com

Sponsored: KEMBA Financial Credit Union  

As we prepare to put 2020 behind us with all of its twists and turns, it is a great time to reflect and prepare for 2021. 

Other than the obvious COVID-19 circumstances, another topic that is on most Central Ohioan’s minds heading into the new year is personal finances and financial stress. 

With the job losses and economic slowdowns we’ve experienced in 2020, shoring up your personal finances is a great way to prepare for any surprises that may pop up next year. 

Here are some key areas to consider for improving your financial wellness in 2021.


One of the best ways to improve your financial outlook is to create a budget. A budget simply compares your monthly income with your monthly expenses; it helps you live within your means and shows areas where you may be overspending or have extra room to spend to pay off debt. Make budgeting a monthly habit and stick to it. Some financial institutions, like KEMBA, offer free budgeting and money management tools to help you get started. 


For most people, a common budget expense is debt, whether it’s credit card, mortgage, student loan debt or otherwise. It’s important to understand your financial situation and develop a personalized action plan to keep you on track to meet your goals or consider a debt management program. 

Debt management plans may help you stop collection calls, lower interest rates, lower monthly payments, or waive fees. According to GreenPath Financial Wellness, people on a debt management plan can usually pay off the entire debt they own in three to five years. When it comes to debt, don’t wait to ask for help until you’re in too deep: take it head on. 

Check with your bank or credit union to see if they offer complimentary counseling to help you get back on track.  


Taxes are one area that many people overlook when it comes to their personal finances. State and Federal tax policies provide opportunities that may help reduce taxable income by contributing to programs like retirement plans, flex spending accounts, charitable donations and Health Savings Accounts (HSAs) to name a few. 

By planning out your pre-tax contributions for 2021, you can maximize your tax savings which may increase your disposable income. It’s always important to consult your trusted tax professional to evaluate your circumstances.

Interest Rates

Examining the interest rates you’re paying on your loans, like credit cards, auto loans, student loans, and mortgages is another way you may be able to improve your personal finances and put more money back into your pocket. 

Especially in the current economic circumstances, it’s worth the second look to see how much you could save by refinancing or transferring current debts. In some cases, you may be able to pay loans off faster and free up cash. 


Many Americans can’t handle a financial emergency because they don’t have enough money saved, which has been especially apparent in this year’s economic downturn. In fact, according to bankrate.com, 37% percent of Americans would have to use a credit card, take out a personal loan, or borrow money to handle unexpected expenses. 

Saving money is an essential habit and is something that will help you weather unexpected expenses when they arise. 

Start by putting a little away each month and as your income increases or your expenses decrease, begin building up a cushion for those rainy days. Plus, ensure you’re making the most on your hard-earned money by utilizing savings accounts with above average rates.


If you haven’t already, you may want to consider investing money each month for your future. Many employers offer retirement plans such as a 401k, which are good options to take advantage of. Your employer may match the money you put into the account which helps your balance grow even faster. Compound interest is an investing principle that reinvests your gains and helps grow your money faster over time. The sooner you start, the more time your money will have to grow. If you are already investing, search your budget for areas that you can cut back and shift those funds to your investment account. Be sure to seek guidance from a trusted investment professional who can guide you on investments that are in your best interests.  

Make 2021 Your Best Year Yet

By following these tips for budgeting your money, managing your debt, maximizing your savings and planning for your future, you’re more likely to be prepared for anything that 2021 throws at you. 

Start with small steps and don’t be afraid to ask for advice from professionals.

If you are looking for a banking partner that can help, consider KEMBA. 

KEMBA offers a full suite of personal banking services, plus complimentary financial counseling, and financial education resources that will help you make your money go further. Get started by calling us at 800.282.6420 , option 4.

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