Whether you’re happy with your current financial situation or wish to improve it, now is a great time to set financial goals for 2022. Here are four simple tips to help you get started.
Tip #1 – Build an Emergency fund
A financial emergency may occur in 2022, so to ensure you’re prepared, build an emergency fund. If you already have one, continue to contribute toward your emergency fund. Many financial professionals recommend saving three to six months’ worth of expenses in an emergency fund that you can easily access if needed.
Tip #2 – Create a monthly budget
A budget can help you make the most of your hard-earned money. It’s essentially a spending plan for your income and expenses. As long as you stick to your budget, you increase your chances of meeting your short-term and long-term financial goals. While there are plenty of budgets out there, you may want to consider these options.
- 50/30/20: The 50/30/20 budget is when you put 50% of your after-tax income toward your needs, 30% toward your wants, and 20% toward your savings goals.
- Pay Yourself First: With this budget, you determine how much you earn after taxes and subtract your expenses. The figure you come up with can help give you an idea of how much you can set aside to “pay yourself first.”
Tip #3 – Pay off your debt
Debt can make it difficult for you to achieve financial security and freedom. If you have credit card debt, car loan debt, student loan debt, or any other type of debt, make 2022 the year you pay it off. Numerous debt relief strategies may help you, such as the debt snowball, debt avalanche, debt consolidation, credit counseling, and debt settlement.
Tip #4 – consult a financial professional
A financial professional can help you review your financial situation and determine a strategy for your situation for the upcoming year. Contact our office today to get started.
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