SETTING FINANCIAL GOALS FOR 2022

Setting financial goals for 2022

Happy New Year! Welcome to another 365 days!! I trust you had a pleasant holiday season with family and loved ones😉

How was your year 2021, financially? If all went well, congratulations! If it didn’t turn out how you wanted, the new year presents an opportunity to start afresh and set new financial goals. 

The best time to set some important financial goals for the next 12 months is now.

“When you plan to start the New Year or another important date for you, it may be easier to change behaviour because we feel like we are making a fresh start,” says Jeremy Burke, senior economist at the Research Center. Social and Economic Studies at the University of Southern California.

Here are five steps financial experts recommend to help you reach your financial goals in 2022:

Setting financial goals for 2022

  1. Get a Clear View of Your Finacial Goals

“The first step for everyone is to get your finances organized,” says Phuong Luong, certified financial planner at Saltbox Financial in Massachusetts. It means making a list of your savings, debts, and assets. Having a complete picture of your finances can help you decide what to focus on for the New Year.

Start tracking your monthly cash flow with a spreadsheet or app to help answer questions about how much mortgage payment you could afford or what expenses you might be able to cut. If you organize these numbers, it’s easier to have these conversations, with a professional or with yourself, about what you can actually afford.

A comprehensive self-assessment includes reflecting on your values, which may have changed during the pandemic. Find out what is really important to you. Maybe you don’t want to spend that much on clothes, or you would like to help more charities. Maybe instead of a car, you want a nice desk and chair. It’s easier to achieve your financial goals when it’s aligned with your values, says Shari Greco Reiches, a wealth manager in Illinois and author of the book “Maximize Your Return on Life”.

Financial goals include getting emergency funds

 

  1. Start Creating Your Emergency Fund

Emergency funds provide flexibility and convenience if you face unexpected expenses, but creating one can be tricky. Behavioural economics suggests starting small.

Instead of setting a goal of saving $400 per month, it might be better to save $100 per week or an even smaller amount each day. There seems to be less friction to start when the time period is shorter, so it’s just pennies a day instead of dollars a month, this makes it seem achievable.

This means that if your goal is to save $1,000 by the end of the year, increase your odds of success by thinking about saving $ 2.75 per day.

Automate your savings

  1. Automate Long Term Savings to hit your Financial Goals

Set up automatic transfers in your savings every month. “In terms of improving long-term results, it really helps to automate things as much as possible.

For example, if you contribute to a retirement account directly from your paycheck, you only need to create it once and your savings will continue to be deducted. You can also sign up to automatically increase the percentage you save each year or each time you get a raise. You can set up similar automatic transfers to an Education Savings Account or High Yield Savings Account for other purposes, such as saving for a down payment.

Repay debt to hit your financial goals

  1. Repay the Debts with the Lowest Balances

People are more successful with debt repayment if they start by focusing on the smaller balances, this is called the debt snowball method. It gives the impression of success and progress and increases the motivation to pay the bigger accounts.

Think about where you want to go in this new chapter of life. Don’t see your financial past as a mistake. It’s all a learning experience.

Having a responsible partner to check in with can also help keep you on track, just like with fitness, if we can have someone watching us, we are more likely to be successful.

Plan a little fun into your financial goals

  1. Planning a Little Fun Too

Setting your financial goals for 2022 doesn’t have to be depressing – you can also incorporate fun spending plans. This can include reconnecting with friends and family periodically. If you want to take a trip in August, think about the cost of the plane ticket, the hotel and the food. If it totals $3,000, try to start saving $375 per month through August.

That way, you are realistic and set measurable goals – two approaches that increase your chances of success.

Read More: Fast and Easy Steps to Create a Personal Budget like a Pro.

 

0 Shares:
Leave a Reply

Your email address will not be published.

You May Also Like