In 2020 I learned a lot about taking charge of my finances from budgeting, debt management, creating new income streams to investing. I made significant financial progress in 2020 and look to build on that success in 2021. While many do not believe in New Year resolutions, I do believe in setting goals. I believe in writing goals down that are specific and actionable. Below I will share some of my financial goals for 2021.
The first goal is to continue budgeting to keep my spending in line. Last year I did a good job of identifying areas in which I could reduce my spending. This year will be more about maintaining my current spending levels and not let lifestyle creep slowly increase my spending.
The next goal is to earn more income. I am setting a goal of $1,000 per month of income combined from dividends and options trading. This is a lofty goal for me considering I did not hit the $1,000 mark in dividends and option premiums even once last year. In fact, I had only one month last year in which the total exceeded $700. At the beginning of 2021 I may fall short of this monthly goal but as I continue to reinvest the dividends and option premiums I should be able to make up the shortfall in the latter half of the year.
Last year I was able to reduce my debt by over $19,000 down to $146,400 of debt including my mortgage. This year the goal is to reduce my debt by $25,000. This will include paying off my car. Paying off my debt is a critical step in being able to achieve to financial freedom.
Investing went a lot better than I expected in 2020. Considering that I had never bought an individual stock until March 2020 I think I did pretty good. As mentioned above, one of my financial goals for 2021 is to earn $1,000 a month in dividends and option premiums combined. This year I need to work on my investment strategy. I need to develop a plan and stick with it. As part of that plan I will be writing an investment thesis for each of my holdings. This will help me to understand why I own each holding and help me have conviction in my decision to own each holding. I also plan to open a Roth IRA with some of the funds from the stimulus check I should be receiving early in 2021.
As 2020 winds down and 2021 is set to begin I am excited about my financial situation for the first time in a very long time. In 2020 I was able to make a lot of financial progress. In 2021 I plan to continue to build on that progress. I can now clearly see the path to my financial freedom and will continue to share my journey throughout the year.