A Fresh Start: Make 2022 the Year You Gain Financial Control

The great thing about the beginning of a new year is that it can serve as a fresh start for a lot of things—including your finances. It’s the perfect time to assess what has worked and what hasn’t, as well as an opportunity to check in with your financial priorities and goals.

 

Now is the time to lay out your financial plans and goals for the next 12 months and beyond. Sound like a strenuous task? Don’t worry—we have a few tips to help you set and stick to a plan.

 

Track your spending

Start by gathering all your statements, receipts and withdrawals from the past few months. Organize essential spending by category—food, shelter, clothing, etc. Note how much you spend monthly for each. Don’t forget to include quarterly or annual expenses in your list, too.

 

From there, add up your monthly income and deduct your expenses. The money left over is what you have available for paying off debt, savings, entertainment and other things. If you have a negative number, that means your expenses exceed your income. Determine if there are areas where you can cut back or reduce expenses so that the amount going out each month doesn’t surpass the amount coming in.

 

By understanding how much you spend and where you spend it, you’ll be able to create a budget and set a strong foundation for your financial future.

 

Review monthly

Once you've tracked your spending for a few months, set a monthly appointment to review what you’ve learned. Ask yourself questions like, “Am I making progress on my financial goals?” “Do I need to adjust my budget?” and “Where can I cut unnecessary expenses?”

 

If you're married or sharing the cost of living with someone, ask them to join you in this review. It doesn't have to be boring or stressful. Cook dinner, put on some happy music and make it a fun evening!

 

Anticipate the unexpected

It's an unfortunate reality—life will throw a curveball at you when you least expect it. Sometimes it's a good curveball, sometimes it can be more challenging. Regardless, aim to have cash set aside for the unexpected.

 

Make it a goal to automatically transfer a certain amount to savings after every paycheck. Start with as little as $25 and increase it every few months—you'll be surprised at how quickly your rainy day fund grows.

 

Use apps to make it easy

In this day and age, people aren't budgeting the same way their parents did. Don't get us wrong, using your bank statement to reconcile your accounts is a tried and true way to keep track of your money—but technology can help, too.

 

There are countless financial apps to help you track your spending, pay bills, contribute to savings and more. You can even do it while binging your favorite television show! Before you sign up, find out which financial apps work best with your financial institution.

 

Set up alerts

You can also utilize your financial institution's email, text and app alerts to stay on top of your spending. Knowing when money comes in and out of your account can prevent costly overdraft fees, not to mention fraud.

 

Tackle your debt

Most Americans carry some level of debt. In 2022, aim to tackle that debt so your money can go toward your wants and needs instead of interest charges. Reducing your debt has many advantages: it will increase your credit score, decrease your overall expenses and help you move forward with your financial goals.

 

There are several different methods of debt repayment. One popular option is the snowball method. Start by organizing your debts from smallest to largest. Put as much money as possible toward the smallest amount. Once that debt is paid, add that amount to the payment on the next largest balance. Keep this momentum going until all your debts are paid. Another option is to focus on the debts with the highest interest fees first so you can pay less in the long run. Whichever way you choose, keep it consistent and stick with it.

 

Maximize your rewards

When you pay your monthly balance in full, the best credit cards can help you earn valuable rewards. Your credit card purchases should help you earn points for cash back, a night out with your friends or travel discounts toward you next big vacation. You could also earn rewards points for discounted gift cards to your favorite stores. Speak with your preferred financial institution about their rewards program options.

 

Save for retirement

You deserve to have a happy and financially secure retirement—no matter how far away that day may be. Now’s the time to figure out how much you have saved for retirement, how much you think you’ll need to live comfortably, and how you can increase your savings.

 

Ask yourself these questions: Do you have a 401(k)? Does your employer offer a matching contribution? Do you have an IRA or Roth IRA? Are you maxing out your contributions every year? Evaluate your plan annually—your future self will thank you for it.

 

Consider investing

Once you’ve gotten to a point where your budget comfortably covers your monthly expenses, you can start to invest even more. In addition to retirement accounts, consider expanding your portfolio by investing in stock, bonds, mutual funds and more. Talk to a financial advisor to get started.

 

Budget for fun

When all is said and done, you deserve to have some fun with your money.

 

In the new year, set goals and celebrate accomplishments by putting some money aside for yourself. Decide on a set amount to help prevent impulse or wasteful purchases while still prioritizing self-care and adventure in 2022.

 

Mountain America financial guides

Mountain America also offers another invaluable free financial benefit—our financial guides. Make an appointment to chat with a financial expert, you don’t even have to be a member. Our guides can help you create a budget, improve your credit score, plan for the future or pay off debt.

 

Schedule a confidential meeting today and get started!