As the pandemic made abundantly clear, each new year brings with it new challenges and opportunities. This is why it’s essential to seek financial advice that’s designed for the times we’re facing. The five tips below should help you come out on top in 2022.
1. Seek professional assistance
Whether you hire a local tax accountant to help you make the most of your tax return or a financial advisor to help you develop an investment strategy, the bottom line is that reputable finance professionals are well worth the investment you make in them.
Of course, the keywords here are “reputable” and “professional.” It’s essential to do your research, both in terms of checking credentials and going through client reviews and testimonials. Once you have a genuine expert on your side, you can power through 2022 knowing every financial decision you make is well-informed.
2. Kill your credit card debt
The new year is a great time to shop around for balance transfer credit card deals. Many credit card companies offer balance transfers with 0% interest for 12 to 18 months. However, you should only consider this option if you’re willing to commit to killing your credit card debt this year.
These balance transfer cards tend to come with a hefty interest rate once the promotional period is up, so you need to destroy your debt within this time. Treat it like a video game quest, create mini rewards for every milestone along the way – whatever it takes to stay motivated.
3. Increase your retirement fund contributions
Whether you have a 401(k) or a self-managed retirement fund, make 2022 the year you start contributing more. If you don’t have anything in place for your retirement, now is the time to set your account up.
Use salary sacrificing or a direct debit to automatically deposit money into your retirement fund. You’ll be surprised at how easy it is to adjust your budget and how little you’ll miss this money. Even if it’s just an extra $10 a month, the magic of compound interest will transform it into a far greater sum for your future self to enjoy.
4. Invest the easy way
If you’re not interested in learning about investment and don’t want to hire a financial advisor, then there’s an easy, set-and-forget way to invest that generally gives excellent returns over time. By selecting one of the best-performing index funds and automatically depositing money (as you do with your retirement account), you can create a second nest egg to secure your future.
Index funds require no work from you. In fact, the less attention you pay to month-by-month fluctuations, the better. These funds are designed for long-term investing, making them a great option for those who want to outstrip inflation without taking on too much risk.
5. Focus on the short term
While these long-term investment strategies are essential, it’s also important to set short-term goals to ensure you remain motivated. We mentioned debt repayment milestones above, but you could also set mini goals like starting or growing your emergency fund, finishing a personal finance course, or cutting out online shopping for a month.
These little goals and challenges can improve your financial position and teach you more about money management. However, the most important purpose they serve is to keep you focused and on track to achieve your long-term financial goals.
Keep the tips above in mind as you plan your 2022 money management strategy, and you’ll be well on your way to a successful year.