Welcome to these early days of 2022. If you’ve set some new financial resolutions or intentions, you’re off to a great start. And since January is Financial Wellness Month, it’s a perfect time to find ways to improve your financial health this year. Thinking through upcoming expenses in the year to come and goals you may have is an easy beginning point.
There’s no question that saving for bigger goals–whether it be a new house, a vacation, or something altogether different–is exciting! But in the meantime, there are plenty of smaller, impactful ways to maintain healthy finances and keep you moving in the right direction.
We’d like to share a few tips that will help get you on track and stay there as you begin the New Year:
- Create a personal budget. Knowing how much money you have coming in versus how much you’re spending each month is critical. It’s the essential first step to having control over your financial life. You don’t know how much you can save until you know how much you spend.
- Spend mindfully. These days it’s too easy to shop mindlessly with Amazon and your other favorites online vendors just a click away. But those clicks add up over time. We encourage you to take a step back, a 24 hr pause if possible, before making that next purchase. A simple step like this can help you save more and spend less.
- Don’t wait to begin saving for retirement. Thanks to the power of compounding, you will have to save less for retirement if you start saving at a younger age. While you can’t go back in time, the best time to start saving money for your future is now. Help your future self see retirement goals as something you can start working toward today, you will thank yourself later!
- Automate everything you can. Saving money is also easy when you don’t need to think about it. Automating a certain amount of your paycheck to go directly into your savings account, investments, or retirement account means you don’t have a chance to spend it–and that makes saving even a small amount of money every month easier. We also encourage you to review your current automations to know exactly how much you are spending each month. Many people are surprised to see they are still paying for subscriptions they forgot about. This is an easy way to reduce your monthly bills and take that money and put it directly into your savings instead.
- Build an emergency fund. Having money set aside for unexpected expenses (like a home or car repair) gives you peace of mind. Ideally, you’d have six months of living expenses saved just in case, but even a month or two will provide a cushion to get through the tough times without taking on more debt. In the words of Lee Child: Hope for the best and prepare for the worst.
Having healthy finances can sometimes seem challenging, but these tips can help you feel more confident and in-control of your situation. Remember, good, daily financial choices made consistently over time really can add up.
If you’re interested in discussing your financial plan for 2022 in more detail, want to get started, or have questions about anything finance-related, we are here.
Disclosure: Emerald Advisors, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.
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