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I do not know about you, but I feel (20) 22.
Or at least I feel ready to make some changes in my money and financial habits. If you want too, this list is a good place to start.
You can think of these as financial decisions, or as relatively simple financial ones to make to maximize your money next year. Not all information will apply to every person, but hopefully there is enough variety for you to find some that appeal to you.
Something else to keep in mind: You do not have to uncheck all the objects at once. Bookmark this and come back to it throughout the year, or use it as a starting point to make your own list for 2022. (If you make your own I would love to see it.)
Without further ado, here are 22 ways to get the most out of your 2022 money.
Imagine your perfect year
As you call in the new year, take the time to reflect on 2021 and think about what, if anything, you would like to do differently in 2022. What went well in 2021? What would you like to change in 2022? Is there anything you have put off that you can finally take steps to accomplish? Spend an evening thinking what you want out of the year.
2. Track your growth
If you want a good overview of your financial position, it is a good start to calculate your net worth. These are mainly your assets (cash on checking and savings accounts, investments, real estate, cars, etc.) minus your debts (student loans, mortgages, overdue credit card bills, etc.).
Try to do this at the beginning of each month in 2022 to see if and how you move towards any savings or debt repayment targets. You can use an app like Personal Capital or You Need a Budget, or create your own Excel tracking sheet. I do it later, tracking the balance on my savings account, checking account, 401 (k), Roth IRA and broker account on the first day of each month. I currently have no debt, but if I did, I would include these balances as well.
Comparing my balance in December 2021 with the beginning of 2019, when I started, shows me how my monthly contributions have slowly increased my net worth, even though they do not feel so much right now. And if I see a decrease from one month to another, I find out what’s going on and if there’s something I need to do to get back on track.
Invest, yes, but be careful about doing so through apps make a game of investing, especially short-term investments and business. Stock picking can be fun, but it is not a way for 99.9% of people to gain wealth (see articles on index fund investments linked above).
If you use trading apps or invest in high-risk assets, at least make sure you have a significant emergency fund in an FDIC-insured savings account.
5. See an economist
How is your relationship with money? If it’s strained, consider one meeting with a financial therapist. These professionals combine financial planning and treatment for mental health, helping clients process their underlying feelings about money, while making plans for retirement, savings, investments and other goals.
6. Monitor your accounts
In 2022, there is no excuse for not being proactive when it comes to cybersecurity.
To protect yourself and your money, you must first know where all your accounts are, including bank, pension, student loans and credit cards. Then, at the very least, make sure you enable multifactor authentication on all your accounts to provide an extra layer of security.
From there, there are a variety of safety precautions you can take. You can set up credit information monitoring or freeze your credit accounts if you have no plans to apply for credit in the near future.
A password manager is also a smart idea. These products keep track of your usernames and passwords for your accounts on different devices, making it easier to use different passwords for each account. Try LastPass or 1Password.
7. Find some inspiration
If your goals feel a bit out of date, look for new inspiration.
Personally, I find subreddits like r / Anticonsumption, r / Bogleheads, r / FIREyFemmes and r / MoneyDiariesActive to be particularly engaging and thought-provoking. Depending on your interests, there are any number of online forums that can appeal to you.
And I never get inspired by the people Make It features on Millennial Money. Spend some time with their stories, and I’m sure you will too.
8. Ask what you are worth
Familiarize yourself with your employer benefits this year. There may be things available that you have not been aware of, such as financial planning sessions, fitness options or gym allowances. Taking a few minutes to go through your HR portal or contacting your benefit manager directly can yield surprising results.
And remember, in some cases, if you rolled over FSA funds from the previous year, you will have to spend them on a certain date. Do not let them be wasted.
Whether it’s once a week or once a quarter, spend a certain day reviewing your finances and more. life administrative tasks on a recurring schedule. Tasks can include checking expenses, scrolling over an old 401 (k), submitting receipts for refunds, returning purchases you do not plan to keep or deleting subscriptions.
To get the most out of this day, keep a list on your phone or any other easily accessible place of the tasks you need to perform, from reviewing your expenses to submitting receipts to checking your net worth.
13. Learn about crypto
Look, you should not throw all your money at cryptocurrencies, but at this point you should take the time to learn about them and how they work. CNBC Make It is always publish new explanations about the latest trends.
Be careful to only learn from people who profit from crypto. This applies to everything, but it is especially important in a relatively new, largely unregulated and developing space. And never invest more than you can comfortably afford to lose, no matter what the asset.
14. Calculate your pension number
Even if you are decades away from retirement, it is important to have an idea of how much you may need to save to support yourself after you have stopped working full time.
This will look different for everyone, depending on your current income, family size, location, health, retirement plans, expected social security payment and so on. But you can use this calculator from CNBC Make It to get a basic idea of how much you need.
Remember: Things change. Get an idea of how much you need, but know that it is likely to change over time.
15. Contribute more to your Roth IRA
Speaking of retirement, financial advisors love the Roth IRA, which allows savers to contribute money after paying taxes on it. Grants and income grow tax-free (provided that investors follow the withdrawal rules), making them particularly powerful investment instruments for workers in lower tax brackets. Essentially, you pay your tax in advance.
Investors under 50 can contribute $ 6,000 to their IRA 2022 and those 50 and older can invest $ 7,000. For younger savers, it comes out to $ 500 per month, but if you can maximize it earlier in the year, even better.
A 25-year-old who contributes $ 6,000 a year until he is 65 would end up with almost $ 1 million, assuming an annual return of 6% (and remember: the grant limit is likely to increase in the future).
So if you do not have one (and meet the income limits), then open one in 2022. And if you already have one, try to contribute more than you did last year.
16. Increase your savings rate
Your savings rate is the percentage of your income that you keep each month, versus the amount you spend (how to calculate it). If you increase it, even slightly, you will have a better financial position. You will have additional money hidden for a rainy day, or to invest in your other goals, whether it is buying a house or investing more.
There are a number of ways to increase your savings: Increase your 401 (k) contributions, try to maximize your Roth IRA or increase your automated savings each month.
The more difficult question is how to find money to make these adjustments. Financial experts recommend starting on a small scale: Increase your 401 (k) contribution by 1% at the beginning of each year or cut out a monthly subscription that you do not need, and send the money to your savings account instead.
17. Reduce your expenses
Another way to save a little and make sure you spend on what’s important to you is to rank your expenses.
Do this by making a list of all your unnecessary expenses over the past three months. Then rank them and try to reduce or reduce the expenses for the least important or necessary. Think about what money you would save on these expenses and what it would look like if you instead invested them in one of your goals.
After nearly two years of postponement, federal student loan payments for about 41 million borrowers will resume February 1, 2022.
To prepare you, financial experts recommend that you check your balance to understand how much you owe each month. Once you have done that, you can find out how to get it back in your budget. In addition, you want to make sure that your contact and payment information is updated with your lender.
19. Make your money count
Think about where your money has gone in the last year or so. Are you happy with how and where you spend it?
If not, make some changes in 2022. It could mean shopping more at local small businesses, cutting off large retailers like Amazon or examines sustainable investments. No, your personal expenses are unlikely to change the way the whole world works. But in many ways, your dollars are your voice. Exercise them with caution.
20. Stop timing the market
Schedule time with your partner to come up with the same page about your finances and goals. It can be uncomfortable if money is a stressful point in your relationship, or if you have different relationships with money, but in the end it will help you grow closer to each other and ensure that you move forward towards what you both want.
Not collaborated but still want to talk to someone? Try to host a money salon – it can be on Zoom – with friends.
Last week during a Twitter Q&A, I was asked what people should do if they get a year-end bonus. Of course, the “responsible” personal finance classics immediately came to mind: Pay down debts, add them to your Roth IRA, save them in a savings account for a rainy day.
But after the last two years, I think we could all use something a little more, yes, fun. So this year, if you can do it, use some of your money to invest in yourself in a way that you have always wanted but never been able to justify before. Maybe it’s by taking a class for a whole new area or hobby, or finally taking the step to move to your dream city.
Whatever it means for you to invest in yourself, make a promise to actually go for it by 2022. You deserve it.
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