As another year ends, another one begins giving us somewhat a new slate. Most of us have new year resolutions or a goal list of the upcoming year. It usually comes as the need to regularly exercise, have healthy food choices, find a new job or getting a new car. I was the same, I also ended a year listing the resolutions and planning out the goals I wanted to achieve for the next year.
When I started being mindful of my finances, I have included at least one financial goal I wanted to start every year. This helped me keep track of my financial growth as well as motivated me to achieve the financial stability I needed. Here are 6 financial goals you should have in 2022:
Build up your emergency fund
An emergency fund is an amount of money set aside for large and unforeseen expenses. It is important that we should have a fallback fund should something happen – like a loss of job. This should be a priority when building your finances especially if you are the breadwinner of the family. .It is a buffer fund for unexpected events like accidents, health problems, and unemployment. An emergency fund can be the difference between being financially prepared and scrambling for funds when the need arises. Life is full of uncertainties and having an emergency fund will help you cushion a huge blow to your finances.
Track your expenses
Tracking your expenses can be a mundane task but a very important one for people who wants to know how the money spent. Tracking your expenses not only allows you to visually see where you are spending your money the most but also how much money you are spending. This will give you a wake up call that you may be spending money on your wants versus on what you really need.
Pay your debts
There is no better way to start a year than focusing on making the year right with your finances. One of a good gift to give yourself is to lessen any existing burdens. This included any existing debts that you just can’t seem to pay off. Focusing a year by planning out how to tackle and pay off you debt not only helps you be mindful of your finances but also takes on financial burden off once your debt is fully paid off.
Plan your budget wisely. Plan on how much you should put into your needs, wants, and savings. If your expenses are tilting heavily towards wants, we recommend that you reduce them so more will be allocated to your needs and savings. Have a good budget plan and stick to it.
A good balance for budgeting would look like this:
- 50% for your needs
- 30% for your wants
- 20% for savings and investments
Learn more about the 50-30-20 budgeting strategy here.
Have another source of income
Having good amount of money saved up and set aside is good but having multiple source of income is way better. Try checking out sleeping skills you have around but did not give enough attention to a build. Working with an existing skill will help you grow more into that skill and also use it to find ways to earn more. It could be side job of doing graphics, editing videos or even teaching english language to foreign clients. Having extra source of income not only increase your capability to save, invest and earn more but it is also a good fallback should you lose of your income stream.
Once you have a fully-funded emergency fund and paid all your debts, you may want to consider investing. Determine what’s your risk appetite—whether or not you’re a conservative or aggressive investor. For conservative investors, you may want to invest in fixed income securities or time deposits as it provides good returns while securing your capital. For aggressive investors, you may want to invest in stocks and mutual funds.