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Some of the links in this post may be affiliate links. If you click a link and purchase an item I receive a small commission at no extra cost to you. All opinions are my opinion. Read the full disclosure here.

2021 is right around the corner and the best time to start improving your finances is right now.

2020 has been a rough year for many, but that doesn’t mean next year has to be bad too.

Let’s set ourselves up for a strong future, today.

Here are several smart money moves to make before the end of 2020:

Get started

If you’ve been telling yourself that you’ll start saving, paying off debt, investing, etc. next year or sometime in the future, scratch that and start now.

Same goes for you if you’ve been avoiding your finances because you’re afraid or embarrassed.

You can’t improve your financial situation unless you become aware of where you stand and create a plan.

Start saving by opening a high-yield savings account and setting up automatic transfers. You can also sell a few things around your home to boost your savings even more before the New Year.

Get started on your debt free journey by getting clear on who you owe, how much you owe, the interest rates, and minimum payments. From there you can decide which debt payoff strategy you want to implement.

Start investing either through your employers retirement options and/or do your research on investing via your own brokerage account, Roth IRA, or individual stocks. You don’t need to time the market, just get started and let your money work for you over time.

Create a budget

Budgeting is important in order for you to gain control of your spending and make progress financially.

I suggest going back to all of your bank statements for the last 3 months and adding up every penny spent. Break down your spending into categories (food out, groceries, clothes, entertainment, etc.) or by store (Target, Wal-Mart, Lululemon, etc.).

This will help you discover your problem areas and your spending habits.

Take an average of your spending in each area and use that to create a starter, realistic budget for yourself and your lifestyle.

Remember, your budget will likely change from month to month!

Set up sinking funds

I started sinking funds in late 2018 and I still believe that was one of my best financial decisions.

Sinking funds are simply savings for specific things or events, such as gifts, car maintenance, travel, medical co-pays, and so on.

Some people like to have cash envelopes for their sinking funds. Personally, I use my high-yield savings account to hold these savings. With Marcus by Goldman Sachs, I am able to create multiple accounts and name them accordingly.

As of right now I put a total of $500 to 7 sinking funds:

  • Emergency fund ($150)
  • Gifts ($75)
  • Travel ($50)
  • Car maintenance ($50)
  • Medical/Dental ($50)
  • Personal spending ($50)
  • and FinCon ($75)

It’s ideal to save for expenses that recur for you often. However, it’s also a lot of fun to save for more fun things that you really want.

Build your emergency fund

I think 2020 taught a lot of people the importance of an emergency fund.

If you don’t have one yet, I highly encourage you to start saving before the end of the year.

The amount you want in your emergency savings depends on each individual. My minimum is $3000, but I add more every monthly and eventually would like to have a years worth of my expenses.

The important thing is to get started. Once you have a well-cushioned EF your financial stress should decrease significantly.

Here are some tips to boost your emergency savings:

  • Sell things you don’t need/want around your home on FB Marketplace, eBay, Poshmark, Mercari, etc.
  • Check the free section of Craigslist or walk around some neighborhoods to find free things people don’t want. Sell them for profit.
  • Go to thrift stores or the discount section of stores to flip items (sell them for a higher price than you bought them).
  • Complete odd jobs for friends/neighbors (help set up furniture, help with a move, clean cars, clean up yards, walk dogs, petsit).
  • Cut back significantly for a few weeks. Challenge yourself to budget a very small amount for groceries or other common expenses. Save the difference.

Compare prices

It doesn’t hurt to do some price comparison for health insurance (including vision and dental), car insurance, home insurance, wi-fi, phone services, etc.

There may be significantly better deals and promotions out there right now.

Recently, my family switched from Sprint to Verizon for our phone plan. We now get better service for LESS money AND we got a $350 rebate per line. Those rebates are paying our phone bill for 6-7 months!

If you don’t want to shop around, it’s worth it to at least call your current companies to ask about discounts/deals.

Check your credit

You are probably aware of your FICO score if you log into your checking accounts and credit card accounts. However, your credit report will go into more detail.

It’s important to check your report every so often just to ensure things are accurate. You don’t want incorrect information reported, otherwise your plans for buying a car or home can get disrupted.

The best resource is AnnualCreditReport.com which is government-mandated.

Review your employee benefits

If your employer offers benefits, review everything from 2020 and for 2021.

Be sure to get a clear understanding of everything that is offered to you and to take advantage of all of it if possible.

  • Retirement accounts – are you contributing enough to get the company match? Is there a vesting schedule? If so, you can use this to plan when to leave/not leave the company if applicable. Check your account(s) and make sure things look good.
  • Insurance – Health, vision, dental, life, disability, etc. Is everything set up properly? Are you enrolled in a plan that fits your needs?
  • HSAs/FSAs – Have you maxed it out for the year? Do you have money you need to spend before the year ends?
  • Wellness perks – Check if your employer offers wellness benefits you may have missed such as gym membership reimbursement, therapy sessions, and HSA contributions for prioritizing your health.

Create a debt pay-off plan

Debt may hold you back from many things in life.

Usually, one of the first big steps in improving your finances is getting your debt under control and creating a plan to become completely debt free.

I have a whole blog post on how to start your debt free journey which goes into great detail.

Also, challenge yourself to pay debt off quicker.

I thought it would take me 6-7 years to pay off my debt, but once I started listening to Dave Ramsey and other debt-free stories, I realized I could pay it off in 4 years or less!

Become future focused

Have you ever thought about how much money you would have now if you actually saved money from your teenage/Summer jobs? Or even if you saved/invested a bit more just a few years ago?

It can be difficult to think long-term when it comes to money. Living paycheck to paycheck by spending all the money you make is the easy route.

Instead, become future focused by saving and investing. Start with what you can and then start to slowly increase your rate each month/year.

Another area to focus on is your health and daily habits. Aim to do things now that your future self will thank you for.

For example, eat healthy foods, exercise regularly, read personal development books, get enough sleep, drink more water, learn new skills, etc.

Set personal and financial goals

As cliche as it is, the New Year is a great time to set some new goals.

Goals give you something to plan for and work toward. Challenge yourself in 2021 to go after goals that make you uncomfortable.

Last year I decided in December that I would do a ‘No Spend Year’ for 2020. It has been such a great experience for me and has really changed my perspective on spending money.

I also set a goal to pay off over $20,000 of debt. I’ve paid off over $15,000 and will probably hit a total of $16-17K down by the end of December. Even though I may not hit my $20K goal, I’m still so proud of trying AND what I’ve accomplished.


So what will you do before 2021??