A new year calls for new resolutions. Exercising more is usually a popular resolution, but did you know you should also be financially fit too? Strengthen your finances in 2022 with our budgeting and savings tips.
- Create a budget & track your spending
Tracking your spending is a great way to create a realistic budget for yourself and to help you save money. Pick the best budgeting method for you – whether it’s old fashion pencil and paper, an Excel spreadsheet or an online tool. Online tools like our Money Manager or apps like Qapital or Mint that can assist you in setting goals, creating a budget, and track your spending.
- Elevate your savings
Increasing your automatic deposits just a small amount, can make a big difference in your finances. Setting aside a certain amount of money for emergencies or unexpected purchases can help prepare your bank account if the unexpected does happen.
- Look for ways to save more
Now that you have a budget and are working to save more, take a closer look at where you can scale back. This could be things like subscription services, multiple gym memberships, too many lunches out, or maybe it’s just been a while since you’ve compared car insurance rates. Be honest about where you can scale back or switch companies to get a better deal.
- Set monthly goals
Remember your budget in tip one? In that step, you should have set aside money for needs like rent, bills, groceries, and an emergency fund. Now, think about what you want – a new car, a vacation, or a night out with friends. Decide how much you need for each goal and then set aside that money monthly.
- Know your credit score
Knowing your credit score is crucial. Having a good credit score affects the loans and rates you qualify for – the lower the rate the less your loan will cost you over time.
Even if you’re not thinking about getting a loan now, check your credit report yearly. It can take a while to clear up any errors or lift your score. You are entitled to one free credit report from each of the credit reporting bureaus yearly. Get your free credit report at www.annualcreditreport.com, you can also pay for your credit score.
- Be smart about what you spend your money on
It is important to understand the difference between things you want and things you need. When it comes to spending your money on something, especially big purchases, really consider if it is something you need and is worth the investment, versus something you want in the moment. Also watch out for “dribblers” - those little impulse purchases that seem small but can really add up over time.
- Invest in long-term savings goals
Open a high-yield savings account such as a Savings Certificate or a Money Market account, these accounts typically require a bigger deposit balance than regular savings but pay higher interest rates which will give you more money over time.
If you have investment accounts like an IRA, 401K, or stocks, take time to check that your allocations and goals still align. You may find that you need to adjust your strategies to better fit your age and goals.
Resolutions can be easy to make but hard to keep. Start small and commit to being financially fit in 2022.