New Year’s resolutions come in every shape and form. You may want to hit the gym more, build up your reading list, or even learn a new language. While these are great goals, financial resolutions often get overlooked. If you're considering a monetary revamp, here are some ways to start fresh in 2022.
How Can I Reset My Finances for a New Year?
Resetting your finances might mean starting from scratch. One of the best ways to get ahead is by educating yourself. There are plenty of resources that offer financial guidance, from debt repayment to investing. Here are some helpful tools:
- Consumer Financial Protection Bureau (CFPB) - Offers a variety of financial education materials.
- Millennial Money - A podcast covering financial literacy for young adults.
- 360 Degrees of Financial Literacy - A comprehensive educational program.
After gaining a foundation, start planning changes. That means reviewing your finances, setting goals, and mapping out ways to achieve them. If you're unsure where to begin, consulting a financial advisor can help.
What Financial Resolutions Should I Consider?
If you’re looking to improve your financial well-being, there are many possible resolutions to set. Here are some great starting points:
- Set a Budget: Track your spending habits and adjust accordingly. If long-term planning is difficult, start with a weekly budget before progressing to a monthly plan.
- Create Financial Goals: Motivation is key. Setting clear goals can provide the push you need to make real progress.
- Improve Your Credit Score: Credit scores impact major financial decisions, like buying a car or a home. Pay your bills on time and in full to steadily increase your score.
- Pay Bills on Time: Missing payments can lead to late fees and mounting debt. Organize your bills and consider setting up automatic payments.
- Save for Retirement: It’s never too early (or too late) to start saving. Review your IRA or 401(k) contributions, take advantage of employer matching programs, and set future goals.
- Build an Emergency Fund: Prepare for unexpected expenses by setting aside savings. Experts, including Vanguard, recommend saving at least 3 to 6 months’ worth of living expenses.
How Should I Prioritize My Financial Resolutions?
Everyone's financial situation is different, so your resolutions should be tailored to your specific needs. Ask yourself: What are your biggest financial struggles? These should take priority.
You may not be able to tackle every goal at once. Consider different strategies, such as:
- Focusing on small resolutions first before moving on to larger goals.
- Addressing the most urgent financial issue first (e.g., debt repayment).
If you’re feeling overwhelmed, don’t hesitate to consult a financial advisor for expert guidance. With the right plan, you can start the New Year with a fresh financial perspective and long-term success.