Many of us take advantage of a new year to turn the page. This can include everything from starting a new exercise regimen to committing to cooking more at home. It’s also a great time to assess your current financial situation and take concrete steps to improve it.
Here are a variety of steps to take at the start of the new year to improve your financial life. Some may be more appropriate than others for your situation.
Review where you are
Start by taking a comprehensive look at your current financial situation. Are you generating enough income to meet expenses? Where could you reduce the cost of living? Are there any loans or debts you can pay off faster? Are you saving enough for your main goals? Ask the tough questions to get a good idea of where you stand. Then consider one of the following steps that seems appropriate to you.
Dealing with Debt
Make a plan to pay off your debts as quickly as possible. A priority should be to pay off high-interest borrowings like credit card debt as quickly as possible. As long as the loans are manageable, you can continue to make monthly payments, but the more you repay, the easier it will be on your monthly budget.
Build up your savings
Financial security is closely related to the amount of money you have. Commit to setting up an “emergency fund” equal to six months of your income to help meet unexpected short-term needs. Next, commit to increasing your retirement savings contributions each month if you can.
Decide to get a better job
Many employers struggle to find the right kind of people to fill positions. This may be the best opportunity in a long time to find a job that pays better and that you may find more enjoyable.
Invest more efficiently
Do you think you could get the most out of your wallet? Take a closer look at what works and what doesn’t. It may be time to “cut your losses” on investments that have proven to be disappointing while putting some of that money to work in assets with greater potential.
Make 2022 different
If you think you could do more to strengthen your financial situation, commit to starting this process now. It may be beneficial to consult a financial advisor to help you find a path to a more prosperous future.
Bronwyn L. Martin is a Financial Advisor and Certified Financial Consultant with Martin’s Financial Consulting Group, a financial wealth advisory practice of Ameriprise Financial Services LLC in Kennett Square and Havre de Grace, Md. She specializes in fee-based financial planning and asset management strategies. and practice for more than 21 years. To contact her: www.ameripriseadvisors.com/bronwyn.x.martin.
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