2022 New Year's Financial Resolutions
by The Cash Queen | January 1, 2022
It’s a new year and it’s time to create a better you. While lots of New Year’s Resolutions revolve around health (and that’s a good thing!), we should also be concerned about our financial health. According to a recent survey, over 70% of respondents say that finances are the number one source of stress in their lives. So, let’s get our financial health together in 2022. Here are 14 financial New Year’s Resolutions you should try today.
1). Save More of Your Money
First and foremost, you should save more money in 2022. Right now, the average American saves about 7% to 8% each month. The lowest amount should be about 10%. These savings can be used for investing for retirement as well as providing for emergencies such as a job loss or an unexpected medical cost.
The best way you can save money is by paying yourself first. When you get paid, put at least 10% of your money in a savings account and don’t touch it. This alone can do wonders for your financing.
2). Pay Off a Credit Card
Did you know that credit cards can charge you an annual percentage rate of up to 29.99%? That means that if you carry a $1,000 balance on a credit card, you can be charged $299 a year in interest alone! It’s time to pay off that credit card. The best strategy here is to pay off your highest interest rate cards first. This will help save you in interest fees. If you have multiple credit cards with high-interest rates, then consider a debt consolidation loan which can simplify your payments and potentially lowers your overall interest rate payments.
3). Stop impulse Spending
Have your started browsing around Amazon or the Apple website and thought to yourself, “I have to have that.” Seconds later, you are the proud owner of a $200 pair of shoes or a $1,000 iPhone that you didn’t plan on purchasing at the beginning of the day. Impulse spending can be a financial killer. Not only that, many stores are designed to make you spend more without thinking about it.
You can prevent impulse spending by putting a “24-hour cooling-off period” before making any unplanned or impulse purchase. Take that time to review your finances and carefully consider if this purchase is worth it.
4). Improve Your Credit Score
One of the best things that you can do for your financial life is to improve your credit score. After all, your credit score is responsible for determining whether you are approved for an apartment rental, home mortgage, auto financing, and other loans. Be sure to get your annual free credit report from the big three credit reporting agencies: Experian, TransUnion, and Equifax. Be sure to understand your credit report and well as your credit score. From there, make a plan to boost your credit score over the next 12 months. Here are some tips on how to improve your credit score:
- Pay off your bills on time
- Don’t try to apply for more than one credit card or loan in less than six months
- Pay off any debt in collections
5). Develop a Side Hustle
Today, having a second income is the norm. In fact, there has never been a better time to get a supplemental income that can help you save more money or simply help you pay off your debt faster. Best of all, there is at least one type of side hustle that you can do either at home or in your car. Here are some side hustles that you should consider:
- Gig work - You can work on freelance sites such as Fiverr and Upwork and provide any service where you have some level of skill
- Uber - With Uber, you can offer rides to people, deliver packages, and deliver food.
- Surveys - Did you know that you can get paid to take surveys. Sites like Survey Monkey and Swagbucks can help you make a few bucks each day.
6). Sell Stuff You Don’t Use Anymore
Everyone has that one closet in the house that is filled with stuff that they don’t use. Chances are that you have at least several hundred dollars of stuff lying around your place somewhere. Well, that extra stuff could easily turn into extra cash that you can invest or save for a rainy day. The good news is that there are a number of places where you can sell your stuff for cash. Here are some top suggestions:
- Next Door
- Facebook Marketplace
- Let Go
7). Set Up Credit Monitoring and Identity Theft Protection
Did you know that 7% to 10% of the American population will fall victim to identity theft each year? This can be a potential nightmare where someone can open bank accounts, credit cards, and loans in your name and potentially cause you to lose thousands of dollars. One of the best ways to prevent yourself from being a victim of identity theft is to enroll in a credit monitoring program. These programs will monitor any suspicious activities such as someone trying to open a bank account or credit card from another part of the country. Some of the top credit monitoring and identify theft protection services include Lifelock and Identity Guard.
8). Contribute to Your Retirement Plans
One of the best ways to secure your future is to make sure that you have a fully funded retirement plan. Most people do not begin to take retirement seriously until they are in the later stages in life. However, the earlier that you start, the better. This is because you can make the power of compounding your returns work to your advantage. If you can only start by adding $10 or $25 a month to your retirement savings, then do so. Be sure to open a 401K or IRA account today to begin funding your retirement.
9). Create a Budget
One of the biggest causes of financial stress is debt. And one of the best ways to stay out of debt is to credit a budget where you know where your money is going each month. While there are a number of different types of budgeting strategies, you should consider the zero-based budget. This is where you assign an expense for all of your income until you end up with zero. This ensures that you do not go into debt each month.
To help you set up a budget, you should check out these three free budgeting apps:
- Mint by Intuit - This is the most popular free budgeting app available.
- Personal Capital - This free budgeting app is ideal for those with investable income.
- Pocket Guard - An excellent free budgeting app for those trying to pay off debt.
10). Wait for Sales
Here’s a great financial New Year’s Resolution that can help you out each month - wait for sales and discounts each time you shop. For instance, when you shop for your food online or at the grocery store, check out what is on sale. Each week, supermarkets tend to rotate what they have on sales. This alone can help you save about 10% per month on your shopping expenses.
11). Calculate Your Net Worth
It’s a good idea to know how much you have. Therefore, spend the first week of the year calculating your net worth. Be sure to include your equity in your home, your savings accounts, your investment accounts, your retirement accounts, and any physical assets. Once you know how much you have, be sure to subtract any debt that you have. This includes the mortgage on your home, what you owe on your car, and any student debt and credit card debt.
12). Update Your Financial Goals
In order to reach financial freedom - where your passive income replaces your working income - you will need to create your financial goals. Spend a couple of hours to figure out how much you can live on when you are financially free from working and how much you will need to save up. The rule of thumb is to take your annual expenses (as someone living financially free) and multiply that number by 25. For instance, if you can feel that you can live off of $40,000 a year. Then multiply $40,000 by 25 to get $1,000,000.
13). Review Your Subscriptions
One of the biggest financial drains out there are subscriptions that hide in your credit card or banking statements. From streaming services to subscription boxes, chances are that you have a few subscriptions that you don’t really use anymore. Be sure to review any recurring charges you have on your credit card or bank statements and cancel the ones that you don’t use anymore.
14). Learn About Investing
In addition to making money, you should learn how to make your money work for you! As part of your financial New Year’s Resolution, take some time to learn about investing. Figure out how other people were able to reach financial freedom early in their lives and consider modeling their investing strategy. It could literally transform your financial life.
Taking Your Financial Life to the Next Level in 2022
2022 could be the year you gain a whole new financial life. Get started with these 14 financial New Year’s Resolutions today. You may be surprised what these simple financial steps can do for your life.
ABOUT THE AUTHOR
Tracie Breaux is a personal finance writer. She is the founder of The Cash Queen and she’s passionate about empowering women to achieve financial independence.