10 Financial Resolutions You Need to Make This Year
As the year is just getting started, many people are making their 2022 resolutions, what they would like to accomplish or change over the next twelve months. The most common resolutions revolve around health, careers and relationships, and not as often they revolve around financial decisions and goals. This can be seen as a costly mistake, as it is wise to plan and set goals, especially for your personal finances.
If you have yet to set your 2022 financial resolutions or maybe aren’t sure where to begin, we highlight 10 financial resolutions you need to make this year:
Learn from last year’s financial successes and failures
Last year, you probably made some good and bad financial decisions. Look through your financial records and the steps you took that affected your finances. Make sure you learn from your last year’s financial successes and failures.
Create a budget
One of the reasons people make bad financial decisions is that they don’t have a budget. So, creating a budget will help ensure that you don’t fall into this trap. Decide how much you want to spend on household expenses, transportation, childcare, loan repayment, body care, entertainment and so on and try to stick to it.
Save more
Basically, saving more this year is the cornerstone to financial freedom in 2022. You can do this by reducing unnecessary expenses, increasing your retirement contributions, boosting your income, and focusing on high-yield saving accounts. If you are not sure where to begin with saving or you have struggled with putting money away in the past, contact a financial advisor for assistance.
Automate your savings
If you have to decide how and when you should save money every time, chances are you may forget or forgo putting money away. Luckily, you can get rid of this issue by automating your savings. On a recurring schedule, you can have money debited from your daily account and moved to a savings account. This automation ensures money is put away and helps you to stick to your budget to cover your monthly expenses.
Improve your credit score
Do you know what your credit score is? Is your credit score lower than you would like? If yes, it is time you focused on boosting it. The higher your credit score, the higher your financial power. You can improve your credit score by repaying debts, paying bills before deadlines, and reducing spending.
Pay off your credit cards completely
The higher your credit card debt and the longer you continue paying the minimum fees, the more difficult your financial situation will be. Therefore, you should invest some time and money in paying off your credit card debt. This can make a significant difference in your finances. Credit card interest is painfully high.
Start an emergency fund
No one prays for emergency financial needs, but they happen every now and then. The emergency could come in the form of unanticipated car or home repairs or a layoff. Don’t just wish away emergency financial needs, start an emergency fund to take care of them. Your emergency fund sweet spot is being able to cover three to six months of your living expenses.
Invest more
Don’t just focus on saving and cutting your expenses, you need your money to grow and investing will help grow your finances. However, don’t rush into any investment; make sure you have a good understanding of it. Depending on your finances, a financial advisor or portfolio manager can help you to manage your investments.
Refinance your student loans and/or mortgage
Do you have a mortgage or student loan? You should think about refinancing them. With the interest rate reductions that we have experienced over the past 18 months, you should be able to save on your monthly interest charges.
Improve your financial literacy
If you know a lot about budgeting, money management, retirement, credit, debt, etc., it will be easier for you to make reasonable financial decisions. There are plenty of online resources that can help you to boost your financial literacy. Also, you can consult a financial advisor to learn more about how to manage your finances. Just make sure you are learning from a reputable source.
It’s time to set your financial goals for 2022 and make your financial resolutions. You can add additional resolutions to the above, or remove those that you don’t feel pertain to you. Make your resolutions based on your own needs and comfort levels.
Wishing you the financial best in 2022.
