Are you already preparing the list of financial resolutions for the new year?
The beginning of the year inspires many people to set goals, projects and changes.
Taking advantage of the general momentum of starting all over again with renewed energy, let’s talk about some financial resolutions to adopt in 2022. After all, you can fulfill your dreams with an organized financial life throughout the year.
1. Set financial goals
Financial resolutions can add to the resolutions you made on New Year’s Eve. Want to take a trip? Is this the year you’re going to have the wedding party you’ve always wanted? Or will you go back to studying? All of this costs money, but it can be easier if you set goals.
For example: earn 2,500 dollars until April or reach the end of each month without having spent more than half of the salary. By setting goals for your life, you are also creating a savings commitment.
2. Start Saving
We all want to save, and you have certainly expressed this intention many times. The problem is just that. Often, everything is just a good intention and expenses increase (and not always in the same proportion as income).
So, where to start? The start of the year is an excellent time to create a financial plan that will help keep the accounts in balance.
Therefore, the first step is to create a budget that includes all expenses and income. By doing this, you will immediately understand if and where you are spending too much.
Then, you have to try to balance the books, using a method that applies to all budgets, regardless of their size: cut spending and increases revenue.
3. Change habits
Combine financial resolutions with other New Year’s resolutions and get rid of unfriendly habits from your life: Smoking, eating meals outside etc.
They are good ideas for your health and will make you spend less.
Impulse buying is another habit that can leave in the new year. Before buying, consider the relationship between quality, utility and price. If it’s too cheap and of poor quality, it’s likely to be short-lived. If it’s something you’re going to use little, then it’s not worth buying, even if it’s cheap and good.
When impulse purchases are paired with credit cards, the result may not be good. So, to make sure you’re not spending more than you can or should, save that means of payment for an emergency.
4. Reduce credit card fees
If you spent much of 2021 thinking you might be paying too many commissions on your credit cards, the start of the new year could be the perfect time to turn things around. Compare cards, especially low-interest credit cards. Always explore the offer to compare and look for the best credit card that, in addition to cash, offers you other benefits such as discounts, airline miles or fuel balance.
5. Protect your assets.
A good financial plan can be cut short if something unforeseen happens. Therefore, consider the protection that insurance can provide you for every aspect you want to take care of, such as your life, your house, your car, or your health. Do not forget that you should worry about what your dependents will do if you cannot make decisions about your money – maybe due to death or illness. Remember to inform your beneficiaries of these contracts, especially for your retirement accounts and life insurance.
6. Change and renegotiate
The most important part of savings-related financial resolutions is cutting back on spending. This cut can be more or less radical, depending on the balance or imbalance of your finances.
It can go, for example, by renegotiating contracts or looking for better conditions for those you have. And this applies both to mortgage loans and the electricity supplier or insurance. Ask for proposals, compare values and see which option allows you to spend less.
Reduce bank fees by opting for a minimal service account and find out what you can do to lower your loan spread or the number of installments. Close bank accounts you don’t use and cancel all services you don’t use.
If finances are already a little slack, taking on more credit is not advisable. Instead, think about creating an emergency fund.
7. Update your New Year’s goals
Whenever you notice a change, it will be time to update your goals towards a more long-term objective. It does not matter if you have not reached the end of the year; a goal may change if the performance is better than expected. Or, on the contrary, things get complicated, and you have to apply some adjustments to avoid the unforeseen. Anyway, the idea is that you update your plan and get back on track.
In conclusion: Fulfill your financial resolutions
It will be of little use to make resolutions if you have not made any progress towards achieving them by the end of the year. Thus, financial resolutions must be realistic. That is, don’t set goals that require too much sacrifice.
If you feel that you will not accomplish what you planned, readjust your goals and create new resolutions.
Remember that you don’t have to do everything at once. You can achieve many things little by little, but always to improve your financial health. Take one step at a time, save for your goals, and make real progress this new year.