How to Make 2021 Your Best Financial Year (Yes, Really)

So, yes, 2020 was a dud on many levels: socially, mentally, financially. Here’s how to get back on your feet and feel good about your finances again.

We’ve scoured the internet so you don’t have to, from money magazines to personal finance blogs. Here are 21 ways to start the year off on the right foot and keep the momentum going all year.

1. Assess your situation (and be honest): create a balance sheet to assess your net worth 

Okay, so this is the scary but absolutely necessary part. Sit down and create a balance sheet so you can get a snapshot of where you stand financially. (You should do this every year). List all your assets — cash, investments, property, valuables, etc. — and liabilities: credit card balances, student debt, mortgage, car payments, etc.

Check with your bank — they likely have templates available online, or you can opt for a simple Excel doc.

2. Review your credit report and credit score

You’re allowed one free credit report a year from each of the three Canadian credit bureaus (check out Definitely take advantage.

It’s important to understand where your credit stands and what lenders may see. It’s also the first step to identifying any changes you may need to make to boost your score. Finally, read your payment history carefully to make sure it’s correct and report any activity you don’t recognize.

3. Tackle your “bad debt” as quickly as possible

Every financial expert will tell you to pay off your debt as quickly as possible. However, there is a difference between bad debt (credit cards and other consumer debt, usually with high interest rates and little pay off) and good debt (a mortgage or business loan, for example, which help build wealth or income over time). Prioritize paying off bad debt with the highest interest rates.

4. Create a budget and track your expenses

Yes, we know, another super exciting task. Essential, though. Here is where you take account of all your recurring bills, your expenses by category (entertainment and recreation), your weekly grocery list — everything that is coming in and out of your account. 

Use whatever tool makes you the most comfortable but will also make you feel accountable. Your bank likely has a template for you (TD, for example) or you may opt for a budgeting app such as Mint that will track and report your spending habits.

5. Reduce bills and subscriptions as much as possible

Once you’ve had a good look at your recurring bills, remove any redundancies and scrutinize where you may be paying more than you have to. Maybe you and your partner both have your own Spotify account and can split a duo account instead. You may pay for Amazon Prime every month but hardly actually use it. You may be dishing out for an internet package that far exceeds what you actually need.

Skim out any extra costs, even if the savings seem minimal — they add up.

6. Get creative with cutting down spending

Take a good, hard look at where your money is going. Ask yourself if you really need to be spending that much. Instead of ordering books from Amazon, opt for a library card. Alleviate your uber habit with public transport. Make more meals at home and take out less. Opt for free YouTube yoga classes instead of paying for that studio you hardly go to anyway.

7. Take advantage of cash back and coupon apps for everyday purchases

There seems to be more cash-back apps, savings apps and reward programs then a person count. Do a bit of research to find a couple that suit your lifestyle and spending habits. Maybe start here.   

8. Review and adjust your insurance coverage every single year

Your needs change every year so make a habit to review all your coverages across the board. You may be paying for coverage that you actually don’t need (or not getting the coverage that you thought you were).

9. Build an emergency reserve (ahem, covid)

There was likely no better wake-up call around the necessity for an emergency fund than when so many of us were facing layoffs and sweeping uncertainty. If you don’t have one already, make this year the year you start saving toward an emergency reserve.

An emergency fund can also be used for any unexpected medical expenses or emergency repairs to your vehicle or house. Traditionally, experts suggest saving three to six months of fixed expenses, though the amount of debt should be factored in.

Money Sense does a good job of breaking it all down.

10.  Put away as much savings as you can.

Save, save, save. If your employer offers a pension plan with a matching policy to boot, use it. If you can commit a monthly amount into a tax-free savings account, do it. Anywhere that you can automate savings, go for it.

11.  Set clear goals for yourself this year and beyond.  

Want to take an epic trip to make up for the lack of travel in 2020? Finally want to make this year the year you are debt free? Want to put that money away for a down payment?

Take the time to sit down and make concrete, clear goals for yourself.

12.  Make saving fun by working in strategies that suit your lifestyle

Setting your goals is the easy part. Planning how to actually meet those goals is where it gets tricky. Obviously, making a commitment to save does mean cutting back but you don’t have to make major compromises. Choose saving strategies that fit with your lifestyle. (Psst: this is FRUGL’s philosophy. Learn more about saving strategies here.)

13.  Look into low-fee, high-interest accounts offered by online banks.

There’s no sense in letting your money sit there without earning interest. While you’re putting away as much money as possible this year, make sure you’re also earning as much as possible — look into online accounts that offer competitive interest rates.

14.  Stop the guessing game – set very clear amounts and timelines to reach your goals

One of the biggest mistakes you can make when it comes to achieving your financial goals is to underestimate how much you need to put away and for exactly how long. Carefully calculating the timeline and any factors involved (your income, total cost of the goal, any interest rates, etc.) will make you feel confident and increase your chances of meeting your goal.

15.  Contribute to your RRSP

Yes, RRSP contributions fall into the savings category, but the closer you can get to your maximum contribution, the more money you may get back come tax season. (And the more money you can put toward your saving goals!)

16.  Maximize your investments

Once you’ve made a commitment to contribute regularly to your RRSPs and have taken advantage of any employer matching program you may have access to, take a look at your total investment commitment. Are you investing at least 15% of your income? Is your investment mix still standing up to your long-term goals? You should reassess every year.

17.  Automate everything.

Your bills, investments, savings — take advantage of everything that you can set up to be transferred and paid automatically. Not only will this make your life easier and pay your bills on time, but it will keep you committed to your savings goals.

18.  Set yourself up for an easy breezy tax season

Think back on the year you’ve had. Any major life moments that will impact your amount owing? A new house, for example, or CERB collection? Make sure you understand how much you may have to owe come the deadline and start preparing (as in, saving).

And, going into the new year, even when the deadline feels ages away, make sure you’re always staying organized. Track all invoices proactively, organize deductible expense receipts in a folder, etc.

19.  Invest in your career

Make this year the year you take that class, learn that new skill, earn that certificate. With online learning more accessible than ever, now is the time to invest in yourself (and set yourself up to earn more in the future).

20.  Find a way to earn extra income.

Easier said than done, we know. But if you can, pick up a side gig. Work hard toward that raise. Sell some clutter on Kijiji. Anything extra that you can earn is money you can put toward this year’s goals.

21.  Make a resolution to practice regular financial self-care.

Undoubtedly, money can be a huge source of stress. Commit to including your finances in your self-care routine by regularly monitoring your spending and your goal progress. The more on top of your finances you are, the more confident you will be. And the more you’ll be able to concentrate on the things that are the most important to you.


We are on a mission.

At Frugl, we’re committed to providing a tool that makes saving money effortless.

Our mission is simple: To give you confidence in your financial future.