With everyone around the world ringing in the new year, there will be many listed goals for 2022. One of the most popular new year’s resolutions is to get better with money. No matter where you are starting in 2022, there are many ways to get better with money in 2022!
For 2022 there are several types of financial goals you can make that can fit into one of three categories.
- Short-term goals, financial goals that can be reached within a year,
- Mid-term goals which are financial goals take about five years to achieve and
- Long-term goals which can take more than 5 years to achieve.
No matter where you are starting for 2022, setting short-term, mid-term, and long-term financial plans are important to get better with money.
Getting financially fit can be easy, with some discipline and a plan. These are the top 3 financial goals to have for 2022.
Short-Term: Create and Stick to a Budget
If you are ready to tackle your finances, it’s time to make a budget. Creating and sticking to a budget is essential for anyone looking to boost their finances. Many families don’t have or budget or don’t know where to start.
A little over 55% of Americans do not use a budget to manage their hard-earned income, according to a survey by The Penny Hoarder. In a similar study 56% of survey respondents said they didn’t know how much money they spent last month. If you want to take control of your finances, a budget is one of the easiest and most effective ways to take control of your money.
Tips to Make Your Budget:
- Find Out Your Take Home Earnings: Have a clear understanding on how much you earn each month and when. Knowing just how much money earn is the first step in creating a budget.
- List All Payments / Necessities: Utilities, housing, insurance, you name it. Knowing how much NEEDS to go out of your budget is a great first step. Additionally, writing out what days payments are pulled or need to be paid can ensure you never pay fees.
- Budget to zero: One of the best ways to make a budget is to budget to zero. That helps you ensure that every dollar has a role to play in your financial goals. One way to help you know where to spend money is the 50/30/20 Rule. By spending roughly 50% of your after-tax dollars on necessities, no more than 30% on wants, and at least 20% on savings and debt repayment, can help you make sure you have a plan for your money.
Budgets are just plans for your money, and help you understand where your money goes in a month. By creating a plan for your money you can easily take control of your finances and make it easy to start working on larger financial goals.
Mid-Term: Boost Your Savings and Retirement
Creating a budget is a must for anyone who is looking to take control of their money. While budget is a great first step, many overlook long-term goals for their finances. Savings and retirement accounts should be a mid-long-term goal for anyone in 2022.
Planning for retirement may seem far-out but with some simple budgeting today will make retiring easier than ever. Similar to creating a budget, planning for retirement accounts for many moving parts. From living expenses to lifestyle choices, having a plan, and saving today will make it easier to retire down the line.
Investopedia listed an informative guide to start planning for retirement. Here are 4 Tips to Start Planning for Retirement:
Timing: How long do you have to plan for retirement? Depending on when you start this can determine how much to start saving today. Additionally, you should plan for estimating expenses, calculating required after-tax returns, risks, and estate planning.
Compounding Interest is Your Friend: Start saving today to take advantage of compounding Interest.
Risks: Younger Investors can take bigger risks (and have more time to recoup losses) while later investors should play it safe.
Plans Change: While it’s important to start saving and planning A.S.A.P. plans and needs can change so make sure to evaluate your current plans and make sure you are on track.
Now is the time to not only create but boost your retirement savings to take full advantage of your retirement. Create a plan and start saving for your retirement today.
Long-Term: Start Investing
Investing is always a hot topic for those wanting to learn more about finances. Whether it be stocks, crypto or even real estate, learning how to invest, and seeing returns is a great long-term goal.
Not sure if investing is for you? Earnest outlines the top reasons you should start investing today, such as compound interest, time for earnings, and that the best time to start investing is now.
With endless options for investments, how can you determine what to choose for you? The best way to determine your investments is to assess your risk profile or risk tolerance. Simply put, risk tolerance is the level of risk an investor is willing to take. No investment is guaranteed to return, so having a firm understanding of the risk involved is important. Before you invest, know how much you are willing to risk on an investment.
Don’t be afraid to ask questions, and learn about different investment types and styles that might better suit your long-term goals. If unsure where to start, meet with a financial planner to help you align for your goals.
Summary
Taking control of your finances is a great goal for anyone in 2022. From baby-steps to long term goals it’s important to take control of your money and make it work for you. Make sure to incorporate the following goals into your plans for 2022
3 Financial Goals you should have for 2022 are:
- Create and Stick to a Budget
- Retirement
- Investments
What financial goal are you making for 2022?
If you are serious about making a new start to this year, consider using Financial Mappers to create a plan which will incorporate all your financial goals. After creating your financial plan, generate a report to remind you of what you can achieve in both the short and long term.
About the Author: Catherine Way is the Marketing Manager at Prime Plus Mortgages: Private Mortgage Note Investing . She has created content for the following industries: Marketing, Real Estate, Mortgage, Finance, Business, Real Estate Investing and many more.
Disclaimer: This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.
Catherine Way
Disclaimer: Financial Mappers does not have an Australian Services License, does not offer financial planning advice, and does not recommend financial products.
