It’s always a good idea to try to take control of your finances. However, the beginning of the year is one of the best times to start tackling this all-important area of your life. After all, new year’s resolutions exist for a reason: starting a new habit at the beginning of the year tends to be easier (and works better) than starting a new habit on any old random day.
With the new year only days away, now is the perfect time to plan out how exactly you can make 2022 your best year financially. You need a strategy and a vision for how you want your finances to improve in the new year.
The world of personal finance is overwhelming, but fortunately, there are plenty of good resources out there that you can take advantage of. Whether it’s an online class or an in-person meeting, you have options – and the best part is, most of them are free!
Take a look at our five tips to put into practice as you begin the new year and the next chapter in your financial life.
Educate Yourself About Personal Finance
Maybe personal finance wasn’t a required class at your high school. Or, maybe you took the class, but it’s been so long you don’t remember what you learned. That’s okay – things happen, and you’re not the only one who isn’t where they would like to be with their financial education. Fortunately, one of the best things about the internet is that you can find out the information you’ve forgotten or never had the opportunity to learn in the first place.
There are so many places where you can learn about personal finance or financial literacy online. Coursera is a fantastic website with free classes in many different subject areas. They currently offer over 700 classes related to personal finance and financial planning. Try out a couple and see if there’s one you like! If you don’t like the Coursera platform, you can look for other MOOCs (Massive Open Online Courses) that offer personal finance classes.
Do you not have time for a whole class? Or are you not interested in taking a class (and having to do all that homework)? That’s totally understandable.
If you’d rather not take a class, then you can check out YouTube for videos that are specific to the financial area you’re most interested in learning more about. For example, search for videos about credit cards, investing, or any other topic you’re interested in.
Depending on your situation, it may be a good idea to invest in budgeting software. There are many free budgeting tools out there that can help you learn how to set up a budget and stick to it. You can search for Google Sheets templates that will help you set up your own budget. There are also paid software options, such as You Need A Budget (better known as YNAB) that will keep you on track with your spending.
When you’re taking an online class or you’re inputting your purchases into budgeting software, you may be frustrated because you’re not reaching your financial goals fast enough. Remember to be patient. Give yourself some credit for the work that you’ve put in. You chose to educate yourself on complex topics and to work to improve your life. That’s something to be proud of and that pride should motivate you to keep going on your financial journey.
Talk To Your Bank
Chances are you probably already have a relationship with your bank or credit union. Depending on how long you’ve been with them, it may even be a strong relationship where you know you can get the service that you need.
Although you know that you can rely on your bank for balance checks and ATM withdrawals, there are many other services that banks provide. First Bank has its own platform with tutorials that are similar to mini-classes for people who want to take control of their finances. They even offer a class on how to protect yourself against cybercrime, which is becoming an increasingly serious issue.
Some banks offer free financial planning services to help you take charge of your future. Schedule an appointment with a banker and find out if this is part of your agreement with your bank. Bring all your information about your retirement accounts (if you have any) with you, and any other relevant financial statements you might have. That way, your banker can get a clear and accurate picture of your financial situation.
It’s also important that you take advantage of the tools that are a basic part of your banking experience. Many banks will give you the option to check your credit score either through their website or mobile app. Try to check your credit score between once a month and once a year.
Another one of these included tools is money transfers. You should set up automatic transfers from your checking account to your savings account, which will help you with our next tip.
Set Savings Goals
It’s hard to save money. We live in a consumerist society where we can have anything we could possibly want at our fingertips. All we have to do is input our credit card information and click “submit.”
The problem with that, of course, is that you have to pay that credit card bill one day, and usually it comes sooner than you realize. When it’s time to pay that bill, you may regret that impulse purchase you made in the store or all the tiny purchases you ordered online. After all, it really does add up.
By educating yourself about your finances, you can learn why it’s important to say no to those smaller purchases and those online orders that you don’t really need. Instead, you should save that money so you can reach your big-picture goals and dreams.
There are plenty of apps you can use to help you reach your savings goals, such as Level, Unsplurge, Toshl Finance, Daily Budget, Acorns, Digit, and Simple. Look through your App Store or Play Store until you find an app that looks like the best fit for your situation.
An app might not quite be your style. The method doesn’t matter as much as the action itself. You can put cash in an envelope in a safe place, or you can set up automatic transfers online. The most important thing is that you are saving – for an emergency fund, towards a major life purchase such as a house or a car, towards a vacation, etc. Try to increase the amount you save every year.
Ask for a Promotion or Find a New Job
This is a controversial tip, but it can help in some situations. If you don’t feel like you’re being compensated fairly at your job, then it may be time to move on. When an employer doesn’t pay an employee a fair amount, there’s an issue. If it’s happening to you, then you need to reconsider your situation.
Do your research before you approach your manager. Approach them politely but confidently. Inform them of why you should be making more than your current rate of pay. Ask them to consider your request and to let them know if they need any more information from you. You can also ask them if there are any upcoming promotions, that come with a pay raise, that you would be able to apply for.
You may have a wonderful relationship with your manager and you may enjoy your job, but if there are other jobs out there where you can make a bigger income while working the same amount, it might be time for you to move on to a new company. You have to remember that your financial health is important, and even if you feel loyal to your employer, the main reason you’re working is so you can pay your bills, not show your loyalty.
Invest More Strategically
Our last tip is another slightly-controversial suggestion that could pay off big time. If you invest in the stock market or in real estate, you may want to start investing more strategically – and that can mean taking more risks.
If you have extra money that is just sitting in a savings account, you may want to buy shares in stocks instead. It’s riskier, but the reward potential is much higher than if you just allow the money to sit in the savings account. Remember to always balance risk and reward.
Similarly, if you’re interested in becoming a real estate investor, you may want to take the money that’s sitting in an account and use it to invest in the market. Research as much as you can before taking this big leap. You could end up wildly successful, or you could end up losing it all, so be extremely careful no matter what type of investment you make.
By educating yourself on personal finance, talking with your bank, setting savings goals, asking for a promotion or finding a new job, and investing more strategically, you have the tools you need to step up your financial game in the new year and for years to come.