It’s a new year, which many are relieved about after a difficult 2020 and 2021. Many of us are mentally exhausted, so I won’t offer time consuming, complex and unrealistic financial goals. Instead, here are 5 easy ways to improve your finances in 2022.
If the past two years taught us anything, it’s that life is unpredictable and uncertain. Things we took as given no longer hold and we’re all struggling to adapt.
This post aims to give you 5 simple tools you can adapt to improve your finances, regardless of your current bank balance.
The 5 easy ways to improve your finances in 2022 that I’ll cover in this post are as follows:
- Set your goals
- Address your debts
- Start saving for a rainy day
- Plan for the future
- Spend if you can
1. Set your goals
It may seem simple, but it’s difficult to achieve anything if you don’t know what you’re trying to achieve.
Setting some SMART (specific, measurable, achievable, realistic, time specific) goals will help keep you on track.
It doesn’t matter what your goals are. You might want to save £5,000, or buy a home or even save for a holiday. Whatever your goal, having it written down clearly will help keep you motivated throughout the year, not just in January.
Your goal might be to get out of debt. If so, the next section will give you some tips.
2. Address your debts
Debt is proven to have a negative impact on your mental health and can be extremely worrying. While it feels like everything is mounting up on you, the best thing you can do is acknowledge your debts. Once you’ve done this, you can start making a plan.
Try not to get sucked in to paying for debt advice. These are often unscrupulous companies that seem to hover around the top of Google searches and drag vulnerable people in.
You can find a free and impartial adviser using this tool.
An adviser will be able to talk you through the whole process from start to finish and help share the burden with you. Don’t suffer alone.
3. Start saving for a rainy day
This might seem counterintuitive if you’ve lost your job or feel stuck in a perpetual cycle of rainy days. But, it will serve you well in the future.
Even if you can only put aside a pound or two a week, it’s worthwhile doing. Much like all new years resolutions, you’re more likely to stick to saving if you build up slowly and create a habit.
Just like the person who runs 10 miles on New Years Day and then doesn’t run all month, there’s a danger of putting £100 away at the start of January and not saving for the rest of the year.
Instead, build up slowly and create a habit that will last a lifetime. You can find out how much you could save using this savings calculator.
4. Plan for the future
It’s difficult to think about the future when times are tough and getting by day to day is your immediate priority.
But, the future is not going away. Ignoring it won’t change anything, except arguably making the problem worse. Just like all financial worries, it’s much better to address the future head on.
Planning for the future can come in many forms. At a basic level, it’s linked to goal setting. Where do you want to be in 10 or 15 years and how are you going to get there?
You should also consider making a Will to ensure your loved ones are taken care of whatever happens to you. I explain more about the importance of Wills here.
Pensions are also key to your future. Start with paying into your workplace pension scheme and up the contributions if you feel able to. This simple step could drastically improve your retirement and financial future.
5. Spend if you can
This is perhaps the most controversial tip. I will preface this by saying this only applies if you are out of debt, have an emergency fund and a secure income.
If, like me, you are lucky enough to still have your income, consider spending some of it in a mindful way.
Now is not the time to be selfish with your cash. Businesses are struggling, pubs and restaurants face permanent closure and increasing numbers of people are losing their jobs.
If you want your favourite shop to still be there this time next year, you need to shop there. If you’re worried about the local restaurant you go to for celebrations, consider ordering a takeaway or buying a gift voucher for when they reopen.
Of course, you can spend your money however you like. My personal choice is to support local businesses, that pay taxes and employ local people. If enough people do this, it will help the local economy and keep people in work. This is so important for economic recovery and for more people to become financially stable.
If you found this year in review post interesting, please like it and share across social media or send it to your friends. I’d also love to hear your thoughts and experiences. Did these 5 easy tips to improve your finances in 2022 help you? What would be your top tips for the new year?
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