8 Financial New Year’s Resolutions To Make You Rich In 2021

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One of the things many people strive towards at the beginning of each year is on how they can improve their financial situation. With the wealth gap forever increasing, it’s more important now than ever to make sure you set yourself up for success. Whether or not you did well financially in the past, it doesn’t matter now. Now is the time to look forward and start fresh.

Even if you’re reading this after the new year, it’s never too late. Here are 8 financial new year’s resolutions to help you become wealthier in 2021

1. Set Your Net Worth Target

Net worth = Assets (what you own) – Liabilities (what you owe)


One of my best friends wrote himself a check for 1 million dollars. Of course, the check was not real and my friend was by no means wealthy. 

In fact, he was still working his way out of debt just as I was. Regardless, he pinned that check to the back of his door so it’d be the first thing he’d see every morning before getting ready for work.

Why am I telling you a story about a fake million dollar check?

What that check lacked in monetary value, it made up for in symbolic value many times over.

My friend went from working 3 jobs at one time to now earning well over $100,000 at his dream job. He was a college graduate with an English degree, delivering pizzas, working as a dealer at a casino, and helping his parents with the family business all at once.

Now he is thriving at his dream job and it doesn’t stop there. He purchased an income producing property and is starting a business for his significant other, all while working full time!

This is just one of many examples of how setting big moneys can:

  • Force you to work harder and smarter
  • Motivate you to learn how to leverage time and money
  • Help you figure out how much you need to retire
  • Encourage you to build habits that will increase your wealth
  • Pass those healthy money habits onto your kids to build a legacy and multi-generational wealth

Without setting a net worth target, you might as well be running a race without a finish line. Even if you don’t reach your net worth goal, you will be richer in the end.

If you would like some guidance on what’s a good number to start with, see how we’re doing it and how we’re using it to reach financial freedom.

2. Track Your Cash Flow

Most people want to earn that 6-figure salary and become hyper-focused on breaking that $100,000 threshold as a symbolism of wealth and success. While it is a great achievement, your definition of career and earning success should not be dictated by a number that is only half of the real picture.

Your financial success should instead be measured by your cash flow.

Cash flow = income – expenses

This is because you could be earning $100,000 a year, but still be broke if you’re spending $90,000 per year.

Most people will know exactly how much they make salary wise, but can only guess on what their monthly cash flow is. This is why most people wonder where all their earnings went at the end of the month.

If you want to make it almost effortless to track both your net worth and your cash flow, I recommend using my favorite financial management app called personal capital

Now that you’re ready to track your cash flow and your net work. Now, let’s move on to increasing them both!

3. Find ways to cut spending

If you’re a normal human being, chances are that you are not immune from lifestyle inflation. Reducing your expenses will help increase your cash flow. This means more money to spend on things you actually need, more money to invest, and less money you will need in the future to sustain your lifestyle.

The harsh reality for most people is that they can choose to live on less now or be forced to live on less later.

The difference is that if you choose to live on less now, you’ll have the chance to live on much more in the future thanks to compounding interest on the money you save and invest.

While a few hundred here and there doesn’t sound like much, it can add up to a large sum of money especially when you can invest it. This year we were able to cut our spending in the year of 2020 by so much money that I decided to write about it.

If you want to learn about some line items we addressed in our budget that will make us $30,000 richer over time, check out this article:

4. Start a side hustle

Let’s be honest, there is only so much you can save depending on where you live and your family situation. That means your cash flow could be just a small stream of pennies and the only way to turn it into a raging river of cash is to get to work! 

There is an endless supply of side hustles out there. Here is a great list of real side-hustle stories.

Want to take your hustle a step further?

Invest it.

Here’s what I’m doing with “extra” money: The Free Money Game For Investors – how I doubled my side-hustle money by making small contributions from time to time.

5. Write AN Investment Policy Statement

If you are in a place to invest. I highly recommend creating an investment policy template. It will help keep you grounded and prevent you from making emotionally driven decisions regarding money. It’s bad enough that society pushes us to buy stuff we don’t need to impress people we don’t know, but with social media now, it’s too easy to make irrational investment moves now with a single click of a button.

Check out my investment policy statement that I created, which I personally use as our guiding light to retiring before 40 years old.

Want to make one of your own? Check out this investment policy template that has been downloaded over 100 times.

Free investment policy template

For the new and the seasoned investor

6. Plan to pay down debt

I know, it’s hard to think about investing when you don’t have money to invest. Trust me, I’ve been there. That is why it is generally a good strategy to make debt payoff a part of your financial plan.

Once you stop owing interest and start earning interest, you’ll really begin to see your wealth grow. Of course, this all depends on the interest rates of your loans.

If your debt is student loan related, I recommend having a year by year plan on paying off your student loans. I paid off $115,000 of student loans within 2 years and created an aggressive debt payoff plan for those to download here.

7. Start or Contribute to an Emergency Fund

“ Plan for the worst, hope for the best”

Lee Child

Did you know that 40% of Americans cannot afford an unexpected $400 expense?

If you’re a reader of Flexcents, chances are that you are part of the other 60%. Let’s keep it that way. Having an emergency fund of 3-6 months of expenses is a great way to protect yourself in the event you are hit with a financial hardship.

There could come a time where you lose your job, have an unexpected car or home repair, or have a medical emergency. You don’t want to find yourself wondering if you will have enough money to pay the bills or not.

8. Help Your Parents or Loved Ones With Their Finances

I enjoy reading and writing about personal finance because it has a direct impact on my life, but it also has the potential to impact the other lives around us.

As the saying goes, a rising tide lifts all boats. Just imagine if you we not doing well and you constantly needed family or friends to bail you out. You probably wouldn’t be feeling good about yourself and chances are, you may be losing self-esteem to the point where you don’t think it’s possible to help yourself. 

On the flip-side, imagine if you were in a good financial position where you could help those around you. Doing so a handful of times is a good deed, while doing so constantly at your own expense can lead to a good way of either becoming broke or having broken relationships. One of the best ways to prevent this from happening is to help others around you improve their money management skills.

Final Thoughts

I love the new year because it gets me and so many others thinking about how they want to improve their life. Getting your finances right is a great way to start as it can improve many other aspects of your life. It can improve your work-life balance, your relationships, your health, and your happiness.

I know there was a lot in this article, so take it step by step. Feel free to bookmark this post and use it as a future reference. I will also be adding to it at least annually.

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