3 Financial Resolutions for 2021 That Everyone Can Keep

Available for Interviews: Harry Abrahamsen

Harry J. Abrahamsen is Founder & CEO Abrahamsen Financial Group. His company offers customized wealth management solutions—creating plans and portfolios that protect, preserve, and grow client’s wealth. He was selected as one of the ten most dependable Wealth Managers in the Mid-Atlantic as published in Forbes magazine.

 

What Harry Abramhamsen can say in an interview on
3 Financial Resolutions for 2021:

As a very turbulent year on many fronts comes to a close, so too does the chapter on our financial summaries. Looking forward, now is a good time to assess where you are and what your financial goals are in the new year. Here are 3 tried to true resolutions that EVERYONE can keep:

1. Save 15% of your gross earnings. The old and outdated 10% savings rule is a simple equation: your gross earnings divided by 10. However, this simply will not be enough to build a nice retirement. Why not save 15% of gross earnings? While mathematics is perfect, money behaves very differently; money erodes—meaning, you lose purchasing power over time. 

For example: 1 + 1 = 2, and if we are around 1,000 years from today, one plus one will always equal two. This is simple math. However, $1 today + $1 next year will never equal $2 dollars, it will always be less. This is due to the wealth erosion of taxes and inflation. Taxes and inflation are just the tip of the iceberg when it comes to ultimate money mastery.

Wealth eroding factors such as planned obsolescence, technological change, market fluctuations, fees, unplanned life events—i.e. black swan events like COVID-19—can wreak havoc on a person’s financial plan. Saving 15% of gross earnings will help you combat all of these factors in the future. Each of these eroding factors can chip away at your future purchasing power and quality of life. If you can’t afford to save 15% then you are living a higher quality of life today then you will be living throughout retirement. If you can save 15% today then you have a better chance at living an equivalent lifestyle during retirement. Money is not math and math is not money. Money is just a number until it converts into lifestyle.

2. Be slow to spend. Slow your spending down. Do not be impulsive. Today, the convenience of buying something is just one click away. We all have smartphones. Just remember, no matter how easy it is to spend your money, money is earned not not made.

3. Do not spend it before it’s earned. Spending money you don’t have is the first step on the slippery slope of debt. Make sure you have it in your bank account before you make that purchase. Of course, some debt (mortgage, car loan, student loans, etc.) is acceptable. It’s the impulsive non-essentials purchases that create financial landmines.

Following these three simple tips will help you stay in good financial shape in 2021 and beyond.