Want to Improve Your Finances in 2022?
If one of your New Year’s resolutions for 2022 is to take control of your money, today’s episode is for you!
We’ll go over 15 different resolutions you can adopt that will help you improve your finances.
Your action task this week is to pick one financial resolution to make for next year.
It can be one of the ones I mentioned or another one, but try to choose at least some way to improve your finances next year. Bonus points if you mix and match some for massive impact.
Meal planning resources:
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Below is the transcript from today’s show. Or you can download the full transcript as a PDF.
Welcome to the Go From Broke podcast where you'll learn how to take control of your money so you can stress less and save more. If you're tired of living paycheck to paycheck or constantly wondering where your money is going, you're in the right place. This podcast is all about giving you actionable tips and advice so you can get started improving your finances today. Can you believe that it's almost 2022? With a new year comes a new opportunity for a fresh start. Whether you've achieved your financial goals from last year or you hit a roadblock, now is the perfect time to reassess and pick some new money resolutions for the new year. Here are 15 financial resolutions you might want to consider. First track your spending. How many times have you wondered where your money went? If it's more than zero, you might want to consider making a New Year's resolution to start tracking your spending. Taking note of every purchase you make and bill you pay will help you become more aware of your spending. And with awareness comes clarity and the ability to start spending according to your values. Tracking your spending is one of the best ways to start taking control of your money. Second, set some financial goals. It's easy to say you want to save money or pay off debt, but if those are really your goals, it'll help to get more specific. Determine what exactly you want to save for or pay off and make a plan to do it. When you set your goals, make sure you're using the S.M.A.R.T. Method. You're making them SPECIFIC. So not just pay off debt, but pay off $10,000. MEASURABLE. Again, something you can measure - your progress towards that $10,000. ACHIEVABLE. If you only make $10,000 a year, that's probably out of bounds. But if you make a hundred thousand dollars a year, paying off $10,000 should be achievable. RELEVANT. Is this something that matters? It's going to be hard to save for something or pay off something if you really don't care about it. And TIME-BOUND. Make sure you have a deadline. You want it done in 2022. Maybe you want it done before the end the year. Whatever it is, make it specific, measurable, achievable, relevant, and time-bound. By creating S.M.A.R.T. goals, you'll be more likely to stay motivated and actually achieve them. Third, do a monthly savings challenge. If you're looking to save money quickly or adjust your spending habits, try a monthly savings challenge. Monthly challenges can have a huge impact on your finances. They're short enough that you shouldn't burn out, but they're also just long enough that you should see some results. Some of my favorite money challenges are the no spend challenge, the roll the dice challenge, and the eat at home challenge. Your results will vary based on the challenge you choose and what your current level of spending looks like, but monthly money challenges are one of the best ways I've found to save money quickly. Forth, build an emergency fund. If the past couple of years taught us anything, it's that we need to be prepared for the unexpected. Building an emergency fund that can cover three to six months of living expenses is one of the best ways you can ensure your financial success. And a credit card with a high limit is not the same as an emergency fund. While you may still need to pay unexpected expenses with credit as you build your emergency savings, you'll want to shoot for having the actual cash in your accounts eventually. Fifth, boost your credit score. With interest rates at an all time low, you may be looking into making some big purchases soon. Before you do make sure you know your credit score and make any moves to improve it if needed. Listen back to episode six, for ways you can
raiseyour credit score. Number six, optimize your retirement to max the match. Does your employer offer to contribute a match to your 401k contributions? If so, make sure you're contributing at least that much so that you can max that match. It's literally free money. If you're not sure about the specifics for your company, contact your HR department to find out. Also, it's worth double checking the funds your retirement is in to make sure you're paying the least amount towards management fees. Even something as tiny as a 1% fee can add up to huge amounts over time. With the amount of time involved in investing for retirement, not only are you paying those fees now, but they're actually costing you the accumulated interest you could be earning in the future. Seventh, automate your savings. I know it can be hard to save when your income is limited, but by automating the process, you can actually force yourself to save, even when it doesn't feel possible. First, make sure you're saving for retirement. Try to contribute whatever percentage the company will match. Again, that's free money they're contributing to your future. If you aren't eligible for a match, start with 1% and then gradually increase it each month. Next, build your sinking funds and automate your savings goal contributions. So pinpoint your most important goals and then automatically move money into those goals with each paycheck. Finally, for everyday savings, you could try an app like Peak Money to automatically save for you. Eighth, make a budget. A lot of people recoil at the thought of a budget, but if you want to take control of your money, a budget is your best tool. For some people, it helps to think of a budget as a spending plan instead. In practice it's the same. You're simply telling your money where you need it to go. The trick to creating a budget that you can keep is the make sure you're spending intentionally and in alignment with your goals and values. You can read more on how to make a budget over on the blog. I'll put the links to some budget posts in the show notes. Ninth, just say no to more debt. Sometimes the best thing you can do to get out of a hole is to stop digging the hole. If you've got any debt or have struggled with debt in the past, changing your mindset so that debt is no longer an option is a great New Year's resolution. Whether you freeze your credit cards or delete them off your devices, simply saying no to more debt will definitely improve your finances. Tenth, review your expenses. If I asked you to estimate your discretionary spending for the month, how close do you think you'd be? I'm betting while you may have a general idea of most of your spending, you've likely forgotten about several things as well. One of the biggest areas of budget leaks is subscription costs. Take a look at your last month's expenses and see how many you forgot about. Are there any expenses that don't really support your goals anymore? Any subscriptions you're paying for that you're not using? If so, go ahead and cancel them. If you miss them, you can always resubscribe later. Eleventh, set up sinking funds. Make sure you're preparing for the unexpected. If you've ever felt the panic of a large unexpected expense, consider setting up sinking funds as your new year's resolution. Sinking funds are simply savings buckets for unexpected or infrequent expenses. Things like Christmas and car repairs are great sinking fund categories. You can also create sinking funds for your savings goals, like vacations and new appliances, computers, that sort of thing. Any large expenses that don't have a definite due date, or the due date's further out where you can divvy savings monthly and grow it over time. Twelfth, cut back on bad spending habits. If you've been listening to the podcast much, you know, fast food is my boogeyman. It's a bad spending habit I'm always struggling with. Be honest with yourself and figure out what spending habits you have that are negatively impacting your finances. Maybe you're addicted to the convenience of fast food like me, or maybe you have an issue with other impulsive purchases or even emotional spending. Whatever your vice, make a resolution to cut back on that indulgence. You don't have to eliminate it, but simply cutting back can have a positive impact. Thirteenth, call around for better rates. Calling to get reduced rates for your debt and insurance are relatively simpletasks you can perform that have a major impact on your financial picture. As money resolutions go, this is probably one of the easiest to do and has the fastest results. If you're carrying any debt, call your credit card company and ask for a lower interest rate. If they don't budge, look into transferring your balance to a card with a low or even a 0% introductory rate. You'd be surprised how much money you can save just by having a lower rate. For insurance, make sure you're checking around every time that renewal bill comes. You might already be getting the best deal, but it doesn't hurt to check. Plus even if you don't want to change companies, you may be able to get them to match a competitor's rate. Fourteenth, boost your income. I'm all about finding creative ways to save money, but if you can find ways to boost your income, you'll hit your financial goals faster than you can by just cutting expenses. So here are several ways you can earn some extra cash. You can ask for a raise. You can pick up extra hours. You can join InstacartShoppers and shop for other people. Try pet sitting with Rover. Babysit for your neighbors. Sell your crafts on Etsy or baked goods at the local farmer's market. You're really only limited by your time and imagination when it comes to finding additional sources of income. Fifteenth, start meal planning. Food expenses are the third highest expense for most families behind only housing and transportation costs. And most of us have no idea what we're spending on food every month. If your grocery and eating out categories are threatening to swallow up your entire budget, meal planning is a great tool to get things back under control. You can find some meal planning resources in the show notes. So there you have it. 15 financial resolutions you can pick from for the year ahead. Your action task this week is the pick one financial resolution for next year. It can be one of the ones I mentioned or another one, but try to choose at least some way to improve your finances next year. Bonus points if you mix and match some for massive impact. Once you've decided on your New Year's resolution, let me know! Send me a DM over on Instagram @GoFromBroke so I can cheer you on. And if you enjoyed this episode, leave a rating and review. And don't forget to subscribe so you don't miss any future ones. As always take action and make it a great day.