Now that we have turned the calendar to 2022, many of us are determined to make (and keep) resolutions aimed at self-improvement. Some popular resolutions include weight loss, less screen time and phone reliance, more time spent reading, and of course, improved financial health.
If one of your New Year’s resolutions falls under the financial category, read further for a few tips and suggestions we have to offer in support of your success!
Financial resolutions should include these 3 strategies
A quick Google search about financial New Year resolutions returned several pages of financial suggestions and strategies, as well as advice – both good and bad. We decided to feature three that we think are somewhat foolproof to stick with and easy to start.
1. Build Your Budget
Maybe the hardest one of our three suggestions, building your budget for 2022 will prove invaluable to your financial goals. Budgeting will help you better understand and envision your goals, which is half the battle towards achieving them. When it comes to budgeting, you want to know your numbers, specifically what goes out – your spending – and what comes in – the money deposited into your account, starting with your salary and including any additional forms of income, such as tips, alimony, and child support. A primary purpose for building your budget involves shaping your spending habits by understanding how you spend your money and whether you’re spending primarily on essentials – things you need – or desirables – the things you want but could live without. Establishing your monthly budget will help you advance towards your financial goals by ensuring that the money you make goes where it needs to and is saved, accordingly. With that, we bring you to strategy #2.
2. Set Your Sights on Saving
While we all understand the value of saving money for a rainy day, many of us tend to understand how quickly a storm can roll in or how long the deluge might last. Bottom line: for most people, it’s just easier to spend than save. Part of the challenge for some comes from not knowing how much to save each month, or how to allocate specific funds from regular paychecks into a savings account. Even more challenging is trying to save money despite financial hardship, which many families and individuals have suffered due to the ongoing COVID-19 pandemic. That’s why there is no single rule for saving. Sure, some financial analysts suggest saving at least 20% of your monthly income. If you can manage that, great! If other financial stresses or challenges make that an impossibility, don’t stop saving entirely, simply shift the percentage you are able to save to what feels comfortable with the goal to reach that 20% metric as soon as possible. Pro-tip: saving for the sake of saving can be difficult to sustain; however, saving for a specific purpose (down payment on a house, engagement ring, vacation, child’s college education) gives your efforts a more tangible target. Another big hurdle when it comes to saving? Debt. Read on for strategy #3.
3. Drive Down Your Debt
Another benefit of building your budget comes from taking a hard, honest look at how much debt you’re carrying. Listing how much money you owe, alongside the corresponding interest rates is a good strategy to help you target your most damaging debts first. Tackling any credit cards, for instance, that have high interest rates will help you save money in the long run. If you feel like you’re drowning in debt, putting together a detailed plan to pay it down will help put you back in control. Depending on how much debt you’re dealing with, you might consider securing a second job, or additional means of bringing in extra income to make a dent in your debt faster.
Sticking to a New Year’s resolution is hard enough. That’s why we are here to help support your financial goals year-round. Contact us today to schedule a convenient time to discuss your financial goals for 2022!