Smart Money Moves for 2021

2020 has been an incredibly difficult year for people across the world.  From health concerns related to COVID to impact of the pandemic on the economy and jobs, we look toward 2021 with hope for a better year for all of us. The New Year is often a time to set goals and resolutions that may help jump-start your plans for 2021.  According to a recent Finder survey, an estimated 188.9 million adult Americans stated they are determined to learn something new, make a lifestyle change or set a personal goal in an effort to better themselves in 2021, a 15.17% increase from the previous year. The top six categories were related to money, health, career, self-improvement, family, and love.  While following through can be difficult, a formal process for prioritizing and establishing goals can help improve your chances of accomplishing them in 2021.

Set transformative goals

Too often, financial resolutions are established that are general in nature. For instance, two popular financial resolutions are “paying down debt” and “saving more, spending less”.  While those are both good places to start, it is important to be more specific when creating your financial goals for the New Year.  Consider focusing on transformative goals that are specific, measurable, achievable and congruent with your life.  Rather than simply planning to “save more, spend less”, consider a goal of that is more specific such as increasing your 401(k) savings rate by 5 percent or cutting your cable bill by $100 per month.  Focus on where you want your financial life to be and then establish detailed goals that will get you there.

Review insurance coverages and beneficiary designations

Protecting you, your family and your assets from unforeseen financial risks is critical and the New Year can be a great time for a comprehensive review. Do you have sufficient life insurance for your family?  Is your home covered in the event of a major catastrophe like a flood or hurricane? 

Consider working with a professional to ensure that you have sufficient coverage in place. Compare group and individual policies and be sure to shop around with multiple carriers as this may help ensure you are not overpaying for coverage.  While this can be time-consuming, a comparison of benefits may uncover significant savings. Just be sure the coverage is truly comparable prior to making any permanent changes.

Finally, be sure to review beneficiary designations so they reflect any recent changes in your life. Death, divorce and other factors may require an adjustment in your designations.

Refinance, consolidate & pay off high interest debt

Mortgage rates are near all-time lows and present a tremendous opportunity to those who can take advantage of them. According to Freddie Mac’s primary mortgage market survey, the rate on 30-year and 15-year mortgages are approximately 2.6 and 2.19 percent respectively. (That is not a typo.)  If cash flow allows, consider shortening your term as this may help increase the interest savings over the life of the loan.

In addition to refinancing a primary mortgage, this may be an opportunity to consolidate other debts. Consider searching on for a list of low interest or 0 percent interest balance transfers.  When structuring a plan to eliminate debt it is often best to target the highest rate debt first.  Remember, paying off a liability that is charging you 14.99 percent is the equivalent of earning that return on your money.

Rebalance your portfolio

With the Shiller price to earnings (PE) ratio at elevated levels (over 33 times earnings), now may be a good time for investors to review their portfolios to ensure that they are still properly allocated. The primary goal of rebalancing is to bring the different investments that make up an investor’s portfolio back into proper alignment. As the markets fluctuate over time, the original target mix changes, altering the amount of risk in the portfolio.  When determining your rebalancing strategy, be careful to review transaction fees and taxes. Keep in mind that capital gains or losses will be realized in nonretirement accounts, so speak to your tax advisor prior to making any adjustments. Remember, investing involves risk and rebalancing does not prevent investment losses. Instead, it is a means to keeping your portfolio balanced between the various asset classes selected.

Hold yourself accountable 

Establishing goals without the discipline to make the sacrifices necessary for their achievement is a common pitfall. Consider working together with your spouse or partner to hold each other accountable. If you find that you lack the self-discipline to stay on track, consider working with a financial coach who can help. Many of the best-performing CEOs, athletes and professionals in the world have trainers and coaches to help them take their goals to the next level. Finding an independent financial resource may help keep you on track. Since everyone’s circumstances are unique, consider speaking to your tax, legal and financial adviser to determine the most appropriate approach for you.


Kurt J. Rossi, MBA, CFP®, AIF® is a CERTIFIED FINANCIAL PLANNERtm & Wealth Advisor.  He can be reached for questions at 732-280-7550, LPL Financial Member FINRA/SIPC.