Welcome to 2022! Most of us relish the feeling of a fresh new start and the opportunity to make some big changes in our lives. But studies have shown time after time that it’s small, incremental tweaks that are the most sustainable.
So if you’d like to start the year off in better financial health and more confidence in your money management skills, these three tips are simple, achievable and super satisfying to put into action.
If you’ve ever wondered where all your money goes, you need to start budgeting.
By tracking your expenses, purchases and savings, you’ll get a better picture of your finances, rather than just estimating or going by your gut.
Budgeting used to be a time-consuming, manual activity, and it’s true that it still requires some effort up front, but with a variety of apps and software that can make it much easier, you no longer have an excuse to skip the number crunching. Some will even sync with your bank accounts, credit cards and other financial products to make quick work out of the whole process.
You likely won’t have much wiggle room when it comes to your fixed expenses, but your discretionary spending might yield some surprises—and with that, opportunities to re-evaluate and cut back, if needed.
Putting aside money for savings should be a priority every month, even if it’s a small amount.
Whether the money is going in a rainy-day fund, towards a big purchase or for your children’s education, saving is a vital part of any financial plan, but you can do better than just putting funds into a savings account, where the interest earned is often just pennies.
It’s time to look into investing as well! Well-managed investments can help grow your nest egg at a much faster rate than simple savings. And with so many investment options out there, there’s something that will fit your risk tolerance and financial goals perfectly.
Start by researching some simple investment strategies online, or speak to a financial advisor for more in-depth insight.
One of the best ways to “save” your money is by paying off your debts!
Interest rates on your debts are usually much higher than those on your savings, making it prudent to prioritize getting rid of any financial obligations you have before you aggressively save or invest. In other words, the faster you can pay off your debts, the less you’ll have to pay on them overall.
There are several strategies you can use, like focusing on your highest interest debts first, or clearing your smallest debts for a morale boost and working your way up. Reducing your debt loads also has other benefits, such as an increase in your credit score and allowing you to allocate your excess money elsewhere. You’ll also feel less stressed and worried about your financial health!
Whether you find personal finances a fun challenge or a tedious chore, you’ll likely have some hidden opportunities to optimize how you spend and save your money.
These tips will help you get started on improving or maintaining your family’s money in a way that will best serve your goals and needs.