It is almost the end of 2021. 2022 is just here and we can't wait to see what the new year has in store for us. More than anything else, most of us are curious to know if things will be in our favour financially.
Well, for that, we need to ensure that everything is in place in terms of finance and we are all prepped for the coming year.
We spoke to Summer Watson, MHS, PhD & Jen Fontanilla, Certified Money Coach and asked her how we can prep ourselves for the upcoming year financially and for the same, what all should we do with our money before this year comes to an end.
1. Check Your Holiday Budget
Holiday season is right here but do you have your budget in check? Begin tracking your money now. Accordingly, create a budget for your upcoming holiday and stick to it. This will help you have a guilt free holiday ahead and also give you a better understanding of your savings and debts. It is better kickstart the new year with a full track of your earnings. This will also prevent you from overspending during the holiday season.
2. Keep An Emergency Fund
For a smooth year, it is important to have an emergency fund handy. Keeping some cash aside will help you plan your expenses better. The expert suggested planning for 3 to 6 months of expenses.
3. List Down Your Debts And Pay Them
With the year coming to an end, you have a better calculation of your funds. List down all your debts and clear them as soon as possible. Clearing debt helps in improving the credit scrore and also frees up some money towards your credit cards.
After paying the debt you will exactly know the extra amount of money you have and you can further use it towards your financial goals.
4. Get Yourself A Life Insurance
Life insurance is a smart investment. In many cases, people do not invest in life insurance and as a result experience extreme financial hardship. Having life insurance protects your loved ones, should the unexpected happen. Look for policies which match your earnings.
5. Cancel Memberships You Don't Need
At the beginning of this year, we are sure you got multiple subscriptions and memberships. Are there programs, apps, subscriptions or memberships that you are still using? These subscriptions and memberships might look like small amounts but they add up a large sum of money to your total expenses. If you aren't really using them, get rid of them right away.
6. Regularly Check Your Credit Report
Not checking your credit card score regularly won't really cut down on the debt. It is important to keep a check on your credit score and plan your expenses accordingly.
7. Assess Your Retirement Plan
Review your current financial goals. Are they still in alignment with what you are investing in? Connect with a financial advisor, examine your current contributions, and accordigly plan your investments and make changes as required. Doing an annual audit of your investments is good practice and supports a healthy financial future.
There are still a few days left for the new year to begin. If you don't wish to kick start the new year with debt and plan your finances better in the coming year, follow these easy tips.
We hope these tips from the financial expert help you plan your finances better in the coming year. For more such stories, stay tuned!
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