Happy, happy, happy New Year!
I really do love the beginning of a new year. With so many of us motivated by the idea of a fresh start, it’s a perfect opportunity to revisit and reset financial goals.
So let’s make the most of this motivation, shall we? Here are the three things you should do to get yourself set up for success in 2022.
1. Set realistic resolutions. If you’re one of those people who get super excited about New Year’s resolutions, that’s awesome. I commend you. But one of the most common issues with setting resolutions is making a promise to yourself that is too hard— if not impossible— to keep. For example, you may say that you want to contribute $24,000 to your retirement fund in 2022. That sounds like a great plan. But do you have $24,000 to spare? Is that realistic with your spending plan? Experts say that a common issue with New Year’s resolutions is that folks make big goals that are a tad out-of-reach, and become disheartened as soon as that goal seems to be unreachable— and may give up on the goal all together. Don’t be that statistic! But at the same time, don’t set a resolution that’s too vague. Something like “get serious about saving for retirement” doesn’t work. Instead, come up with a set number that is reasonable for your spending plan. Or, if your spending plan is a bit up-in-the-air, try to set goals that are concrete, but not based on a certain dollar amount—like making a will, starting a Roth IRA, or opening up a brokerage account.
2. Go through your bank statements. I know that you want your 2022 vibes to be glamorous, glitter-covered and champagne-soaked; and going through your bank statements does not really fit into that glitzy vision. But hey, we check our bank statements so that we can enjoy the celebratory moments— so we can not feel guilty when we buy the champagne, right? So go through your bank statements. And when you do, pay special attention to subscriptions. Maybe you subscribed to something that started as a free trial, and you forgot to cancel so now you’re spending $9.99/month on something you don’t need. Maybe you have an annual subscription that’s about to renew, and you can catch it before the deadline. These are the sneaky costs that are playing hide-and-go-seek in your bank statements. So find them, and don’t let them ride your coattails in 2022.
3. Automate your 2022. Here’s the great news about this tech-savvy time: if you want to set yourself up for the year, you don’t need to work at it every day. You can set up an automated deposit today that will last throughout the whole year. You could set up an automated sub-savings account to fund a financial project or goal; or, you could automate a deposit from your paycheck to go directly into a retirement account or an Index Fund investment. Isn’t that great news? You can take one afternoon and set yourself on financial track for the whole year. So why wouldn’t you do it?