It’s that time of the year again! You know, the time of year when you tell yourself how much better the new year will be because you’re going to accomplish all these great things. Only this time around, you won’t be calling it quits by early February. Here are some financial New Year’s resolutions you can actually stick to in 2022.
Make a realistic budget
Budgeting is the key to a bright financial future. It helps you avoid overspending and can make it easier to achieve financial goals such as buying a house, saving for retirement or paying off debt. Use a budgeting app to track your spending or take a more hands on approach with one of the following budgeting methods.
- Envelope system – Create envelopes for different spending categories along with a set cash amount. Then spend accordingly.
- 50/30/20 budget – 50% of your take-home pay will go towards needs, 30% devoted to wants and the final 20% goes to your savings or debt.
- Zero-sum budgeting – The idea is to give every dollar a job, so you don’t waste it.
Pick a method that feels natural to you and try not to be too restrictive. The goal is to create a plan for your money, not cut out everything you enjoy.
Save money every month
Forget the rules about saving a specific amount if it’s too overwhelming. Just make it a point to save something each time you get paid or come into extra money. Start by saving your spare change or holding on to every $5 bill you come across.
Pay yourself first
Sometimes you’re so busy taking care of everything and everyone else that you neglect yourself. But you’re important too. There will always be bills and other excuses not to save. So, make yourself a priority and pay yourself first. Set up automatic transfers with your bank to build your emergency fund or enroll in your employer’s 401k plan to save for retirement. For 2022, the 401k contribution limit is $20,500.
Improve your credit
Having good credit will help you get the best interest rates when you apply for a loan which saves you money in the long run. Download a free copy of your credit report from AnnualCreditReport.com and look for any errors that may be negatively impacting your score. If you spot something that doesn’t add up, you’ll need to contact each of the credit bureaus and the business who reported the information. Other than that, the best way to improve your credit is to pay your bills on time and in full every month. It also helps to keep your balances low, preferably under 30% of your available credit limit.
Find a better job
Life is too short to stick with a job that’s making you miserable. Spruce up your resume and start looking for a job that’s better for your wallet and your mental health. Here are some tips for job hunting while still employed:
- Keep your mouth shut
- Use your own personal phone, computer, and email for job searches
- Job hunt on your own time
- Schedule interviews and calls during off-hours or lunch
- Update your LinkedIn profile but turn off public notifications
Most importantly, continue to work hard. You don’t want to slack off and get fired before you have something else lined up.
Pay down debt
You’d be amazed at how much debt you could knock out in a year if you made it a priority. Create a list of your debts including who you owe, your balance, the interest rate and due date, then strategize how to pay it off. Many people use the debt avalanche or debt snowball method to get out of the hole. To come up with extra cash, you can sell anything you no longer want, start a side gig or get a second job. Just make sure the extra money goes towards your debt and not towards buying more stuff you don’t need.
Learn about personal finance
Wish you knew more about money? If so, spend the year learning all you can about personal finance. You can set a goal to read one financial book per month, enroll in personal finance classes or subscribe to money blogs. Here are some finance books for beginners to get you started on your journey:
- The Richest Man in Babylon by George Clason
- The Simple Path to Wealth by JL Collins
- The Millionaire Next Door by Thomas Stanley
- Your Money or Your Life by Vicki Robin and Joe Dominguez
- I Will Teach You to be Rich by Ramit Sethi
File your taxes early
Around 33% of Americans put off doing their taxes until the last minute. If you typically file right in the nick of time, switch things up by filing early for a change. You’ll minimize stress, get your refund faster and reduce the risk of someone stealing your money. If you end up owing the IRS, filing early will give you more time to come up with the cash so you avoid late fees and interest. ezTaxReturn is the fastest and easiest way to go your taxes.
