As 2022 approaches at a frighteningly fast rate, it’s a good opportunity to reflect on the year and plan for what lies ahead. For a lot of us, this means thinking of some resolutions to live by in the coming year and beyond. Naturally, you start looking at your finances as a place for resolution inspiration. In truth, we can all be a bit guilty of spending too much money and neglecting our savings. Especially during the last few months of the year where we go a bit crazy. So, it’s not surprising that so many people start the New Year in debt.
With that being said, today’s post will introduce some ideas to help you take control of your finances in 2022, helping you achieve a greater sense of financial security.
Create a proper budget
Don’t just make a loose budget where you aim to spend no more than a certain amount of money each month. Instead, take the time to review your income and outgoings, drawing up a proper budget. There are loads of budgeting tools and apps you can use to do this, and you can even break your budget down by week. This will make you spend less and save more, creating the perfect balance for financial stability in 2022 and beyond.
Stop borrowing so much money
Borrowing money isn’t always a bad thing and it can help you get out of some tricky financial situations. Using things like payday loans to pay bills before your paycheque comes in can be a smart decision. Likewise, borrowing money through your credit card can delay big payments and give you more time to prepare for them. However, borrowing too much money gives you too many debts to repay. It makes it harder for you to manage your finances and can often lead to financial instability. Keep your borrowing to a minimum and you will have more control over your money.
Start an emergency fund
The purpose of an emergency fund is that it sits there and grows in the background. It’s not something you call upon all the time; you only take the money out in case of an emergency. Everyone should have savings accounts that are dedicated to saving for something – a house, car, your education; whatever. But, you should also start an emergency fund that’s used for situations that spring up without a moment’s notice. Thanks to your new budget, you can afford to save more money every month. Some should go to your savings accounts, while some should go to your emergency fund. This way, if you’re ever hit with surprise payments, you can dip into the emergency fund to cover them, lessening the impact on your finances and avoiding debt. Funnily enough, this can also stop you from needing to borrow money!
Taking control of your finances means that you are in charge of everything. You know where your money is going, you know where it comes from and you can manage all of your ongoing payments. These three tips will help you gain the control you need to feel financially stable in the New Year.