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The practice of making New Year’s resolutions has been around for a long time, and it’s a great way for people to set different goals and motivate themselves to achieve them.
You might have a number of goals in mind for 2022, like getting more exercise, being in more contact with your friends, or finally using your kitchen instead of ordering take out all the time. But it’s also helpful to make financial resolutions specific to this time of year. Here are America’s most popular financial resolutions for 2022, according to a recent Principal poll.
1. Spend less money
It’s no surprise that spending less is at the top of the list of resolutions in this survey. Spending less money could be your ticket to achieving a host of goals, from buying a home to paying off the balances you’ve carried on your credit cards.
If you’re truly invested in spending less, set a budget to follow. This way, you’ll see how much you can afford to spend on different spending categories, and you’ll also be able to more easily identify areas where you can spend less.
2. Put more money in savings
The pandemic has taught us (the hard way) that it is important to have a decent amount of cash reserves. In fact, it’s a great idea to have enough money in your savings account to pay for three to six months of essential living expenses. This type of emergency fund should cover you in the event of job loss or expensive bills for medical care or home repairs. Or, you might need it for some random car repairs.
The point is, you never know what life might throw at you. And having more money in savings could help you not only achieve different goals, but also help you avoid getting into debt when unforeseen expenses increase.
3. Create a will, trust or estate plan
You don’t have to be rich to have a will in place, and it’s not something you can avoid doing just because you don’t have any dependents. Without a will, you have no say in what happens to your assets after your death, so it pays to have this document in place.
In addition, if you want to secure the future of your family, it pays to establish an estate plan, and meeting with a lawyer could get the ball rolling. Some lawyers charge a fixed fee for preparing a will and developing an estate plan, although the amount you pay may depend on the complexity of your financial situation. It’s a good idea to schedule this meeting for the peace of mind it might give you.
4. Meet a finance professional
There is absolutely no shame in going to a financial advisor whether you are new to the workforce or about to retire and want some advice on how to plan for your retirement years. retirement. You also don’t have to be rich to benefit from working with a financial professional.
Quite the contrary, an advisor can help you get the most out of your income and assets, no matter how small they are now. A financial professional can also help you set goals and develop a plan to achieve them.
Your financial resolutions may seem different from the ones above. If you have a personal loan balance, for example, your primary goal may be to lose it in 2022. Or, you may have a goal of increasing your credit score or putting more money into your IRA or 401 (k) ( k). No matter what you decide to do in the New Year, it helps to put those goals in writing. Having this booster could really help keep you on track and give you something to be proud of this time next year.
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