At the start of each year, many people make resolutions to improve their finances, like paying down debt, saving for a large purchase, or planning for retirement. If any of these resemble resolutions you have made, here are some practical tips you can use to prepare meet your financial goals in 2022.
Look Back at Last Year’s Finances
The first step in making an effective plan for the year is evaluating how you did last year. Begin by asking yourself the following questions:
- Did you make any financial resolutions, such as paying off debt or improving your credit? If so, did you reach them?
- Did you achieve any financial goals that you set for yourself?
- Do you have more or less debt than when you started the year?
- Do you have more or less savings than when you started?
- Has your credit score increased or decreased?
Answering these questions will help you assess your progress, so you can adjust your strategy for this year.
Review Your Accounts
Take a closer look at your checking and savings accounts, credit cards, and any investments, such as your 401(k). Review your fees and earnings to see whether you need to shop around for new accounts this year.
- How many fees did you pay on your accounts?
- Did you ever overdraft on your checking account? If so, how many times?
- How much money did you earn on your savings account and investments?
Set a Realistic Budget
The Consumer Financial Protection Bureau (CFPB) has developed tools to help make budgeting work for you.
- The CFPB's spending tracker is a great way to see trends in your spending. As you begin to list out your spending, you may find areas you can cut back or reduce.
- You can also fill out a cash-flow budget. This weekly tool helps you assess your income and expenses to make sure you have enough to cover your bills and put aside money for savings goals or other things you want and need.
Deal with Debt
Dealing with debt can look different for everyone’s specific situation. Whether paying off student loans, a mortgage, or other bills, the new year is a time where you can decide to get a handle on your debt and make some positive progress. If you have fallen behind on some payments, the CFPB provides list of steps you can take to get back on track.
Your Employee Assistance Program is Here to Help
Your Component Employee Assistance Program (EAP) can provide financial consultation services or refer you to a screened financial counselor who can provide you help in making your family budget.