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This year is coming to an end, and you will undoubtedly be anxious to end your holiday shopping, prepare to travel, or meet the final deadline.
The last thing you need is another item on the to-do list, but a little financial reflection and planning is essential before the calendar moves to 2022.
Making these year-end fund transfers will help you deal with anything you encounter next year.
6 money-making initiatives before the end of the year
1. Set financial goals for the coming year
When you look forward to the end of 2022, what makes you feel fulfilled? What if you halved your credit card debt? What if you could increase your savings account to four or even five digits?Or build that Emergency fund You might have to dip into this year?
Think about what you want to celebrate at the end of 2022, and then set some goals to help you achieve them.
We are fans The SMART method of setting goals. A SMART goal is:
- specific
- could be measured
- achievable
- Actual
- timely
For example, “Financial Security” is not a SMART goal because it is ambiguous.
On the other hand, “Save $5,000 in my emergency fund by the end of 2022” will be considered SMART because it is specific, measurable and timely.
By thinking about your financial goals in this way, you will be more aware of what you are going to do, which will give you a better understanding of how to allocate resources and energy in the coming year.
If you don’t want to set your own goals, you can use our step-by-step guide Set financial goals You can actually reach it.
2. Review your spending in the past year (and treat it honestly)
We know it will not be very interesting. In fact, this can be very tedious.
This is a shortcut: if you use online banking or similar applications You need a budget or Mint, You may have access to graphs that show how much of your income is used for specific expenditure categories, such as food, entertainment, and household expenses.
However, you can coordinate your spending without digital tools.
Why is this so important? This is how to find out where you actually spend money.You may think you don’t have a penny to sit idle, which is why tumbleweed is rolling in your savings account, but Keep track of your expenses It can reveal a different reality where you actually spent a lot of money, such as scented candles rescued from Target’s clearance end caps.
If you encounter difficulties in achieving your financial goals and are unable to figure out why, knowing exactly where your funds are going is the first step to make your actions meet your goals.
After you have tracked your expenses, you can proceed to the next step.
3. Develop an effective budget-finally
Listen, we know that many people don’t worry about budgeting.we A survey of 1,500 Penny Hoarder readers was conducted in April 2019 And found that 40% of them had no budget.
But you really, really need a budget.This article outlines Five good reasons You should have a budget that includes eventually breaking the salary-to-salary cycle and determining where you are overspending.
If you have never set a budget before, please read this A step-by-step guide to budgeting for beginners.
We also outlined The eight most popular budgeting methods. Find the product that best suits your needs and personality.
You can try one of them Our favorite budget app, Or go old school with pen and paper and set a Bullet diary, One Budget binder or Envelope system.
Our motto: If it works for you, then it works.
4. Extract your credit reports and check them for errors
When you Review your credit report Using the magnifying glass, you may find the following:
- Does not belong to your account. The account on your credit report may actually belong to a person with the same name. You, Karen Smith, really want to have Karen Smythe’s overdue Dillards credit card on your credit report?
- The account you did not realize is in arrears. Maybe your dentist’s office repeatedly sends bills to the wrong address until the unpaid bill ends in the collection, leaving a huge black spot on your credit report, and you didn’t apply for a car loan or mortgage. Knowing that these were rejected.
- Outdated or incorrect information about your account. Maybe you paid off a loan last year, but it still shows as unpaid, or your credit card balance is listed as much higher than ever. These may significantly affect your credit score, and these three small numbers have a great impact on your ability to obtain credit in the future.
All these errors can be resolved by contacting the appropriate credit bureau. How is this done.
5. Make a retirement plan and stick to it
We don’t have to tell you that many people don’t save much for retirement.
Rather than being another statistic, why not let 2022 be the year you finally take retirement seriously?
We break down the retirement planning process into Five-step guide This will help you get started.
The first thing you need to decide is which retirement account you want to set up.if your Employer provides 401(k), Please make sure you are registered. If your employer offers a 401(k) match, please at least provide enough funds to make the most of it. After all, that game is part of your compensation. You have the right to get it!
If you leave your previous job with 401(k)s, Transfer them to your new retirement account.
If you cannot use a 401(k), you can still choose, including IRA and Roth IRA.This post has K When trying to make a decision in it, you should ask yourself.
After setting up your retirement account, please make regular contributions to it. It’s okay if you can only deposit $25 a month-it all adds up.
6. Celebrate your victory!
Although we have been discussing how to do better in the future, we also know that you may have accomplished something to be proud of in 2021.
May be you Started a side business This helps you make ends meet.Maybe you manage Save a lot of money? Or maybe you start to educate yourself Personal finance ——After all, you are here, haven’t you?
Take a few minutes to think about what you have done in the past year that you are proud of, and then let it immerse in it.
Now remember that feeling in the coming year, especially when you encounter setbacks (because you will inevitably encounter them). I believe that if you stick to your plan, you will experience that kind of satisfaction again this time next year.
Molly Moorhead is the senior editor of The Penny Hoarder.
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