Happy New Year! I hope you had a great 2021 and that 2022 is even better! Every year millions upon millions of people make New Year’s Resolutions usually with the goal of making changes to improve themselves and their lives, so we are going to kick off 2022 with some personal finance resolutions. Today, I’ll cover four easy ways for you to start changing your finances in 2022. And with that, let’s dive in:
4 Ways to Improve Your Finances to Start 2022
- Open a Roth IRA (as long as you don’t exceed the income limits to contribute). For just about everyone, Roth IRAs are the best way to save for retirement. You can use any of the large brokerages to open an account (Fidelity, Vanguard, Schwab) or you can use smaller brokers as well. If you don’t actively invest, you can just put money into a low-cost index fund or Target Date fund.
- Wait to purchase your next 3 wants. We live in a world of impulse buying and ‘keeping up with the Joneses’ while being constantly fed advertising about the newest, coolest thing you ‘should’ buy. My suggestion is to wait on the next thing you want and DON’T absolutely need, especially if you have credit card debt.
- Figure out how much you spend and where. This may seem too simple for you, but if you’re not able to save and don’t know how much you spend, you probably won’t start saving anytime soon. As a society, Americans have a spending problem. Most of the inability to save stems from overspending, and if you don’t know how much and where you are spending, you probably won’t know how much you can save on a regular basis.
- Put extra money towards high interest debt. I consider any debt with an interest rate of 6% or higher a high interest rate. When you are paying off debt, any additional money paid towards the balance of debt saves on interest costs. Debt is a burden. Paying down and paying off debt will not only save you money, but it will also reduce the financial stress in your life.
There are plenty of other ways to improve your finances, but these are four great ways to start out your 2022 finances on the right foot. If you really want to make changes this year, give the Six Steps of the Rat Race Off Ramp a try. Take it one step at a time to start, and get moving in the right direction. Make 2022 the best year for your personal finances and your financial future!
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