Financial New Year’s Resolutions 2022
With 2021 almost ending, it’s time to bring out the pen and paper (or your Notes app, whichever you prefer) and list down your resolutions for the coming new year.
With the financial difficulties brought on by the pandemic, people will surely center their resolutions around money and the things that they should do in order to preserve their wallets.
Want to improve your finances in 2022, but don’t know where to start?
Don’t worry, we’ve listed down five financial New Year’s Resolutions that can help you achieve a healthier financial future!
1. Save money.
One perfect way of welcoming the new year is by disciplining yourself to put more money into your savings! It’s a no-brainer: you get to manage your money efficiently while putting some of it aside for your short or long-term goals in the process.
Whether you’re going for a ten-month or ten-year savings horizon, it pays to maintain a high-interest savings account in a traditional or digital bank that you can easily access or deposit money into. You can set up automatic transfers for easier transactions.
If you’re one of those people who withdraws their savings as much as they deposit, you can set up rules like “I won’t spend every 50 peso bill I touch” or “I will save 100 pesos everyday”. You can also print “52 Week Money Saving Challenge” to keep saving more interesting.
2. Create a budget. Or a plan.
After setting aside a part of your income on savings, make it a habit to create a weekly or monthly budget. You can follow the 50-20-30 rule or create your own based on your needs and wants. From there, allocate a set amount of money per expense: food, rent/mortgage, transportation, medical costs, utilities, and so on.
Once you’ve sorted out your budget, you can now cut down on unnecessary expenses and use it on your savings, any overdue loans, or investments for your future.
If you find it difficult to stick to a restrictive budget, you can ditch the traditional way of budgeting and create a spending plan instead. The end result is the same a budget sans the restrictive rules.
You can start by determining how much income you get in a month (from your full-time job to your little side hustles) and identifying the top categories you should spend on such as housing, utilities, groceries, etc.
After you set aside a certain amount on these categories, you can decide on the miscellaneous categories you want to spend your remaining funds, such as entertainment, dates, etc.
3. Pay off debts
We get it— applying and being approved for a loan or a credit card can give you an additional financial lifeline when you need it.
But don’t be fooled: loans and credit cards are still obligations that you have to dutifully repay. Racking up too much debt can easily eat away at your income and savings, not to mention the interest and penalty fees that come with every late payment.
It is very difficult to get out of a debt cycle once you’ve been sucked in.
Start the year right by paying off your debt, starting with high-interest loans. If you’re in a tight crunch, you can approach your bank or private lender for loan restructuring. For credit card debt, you may look into balance transfer cards which can help you save money on interest charges.
Paying off your debt will also improve your credit standing! Being a good payer gives banks and other financial institutions the confidence to grant your future loan applications.
Other ways to boost your credit standing include paying your bills on time, lowering your credit utilization ratio, and refraining from applying for new loans too often.
4. Increase your income
There’s no shame in admitting that you may not be earning enough for the work you put in. It’s perfectly valid to ask for a raise or look for other income sources if you’re being shortchanged, or wanting to start a side hustle to supplement your 9-to-5.
This 2022, you can negotiate for a salary increase or look for a bigger paycheck if you think you deserve it. You can look into freelance opportunities or start a small business to increase your income, or passive income opportunities if you’re already too occupied. After all, it helps to save or invest more if you’re earning more.
5. Investments and retirement planning
Once you’ve saved enough money, sorted out your debt, and got that much-deserved pay raise, you can now dip your toes into investments and retirement planning, depending on your own time horizon.
For example, exchange-traded funds (ETFs), real estate investment trusts (REITs), and PAGIBIG MP2 can yield high returns even in a short amount of time. Even owning a few real estate properties can be a good investment, especially if they are in high-value locations.
You can also avail of insurance policies to safeguard your loved ones in case of death, accidents or health emergencies.
In terms of retirement, you can trust government pension funds, the Personal Equity Retirement Account (PERA), and financial funds from banks and other financial institutions to help you and your loved ones live comfortably after retirement.
These are just some of the resolutions that you can do in order to boost your finances this coming 2022. Do you agree with our list? Share your strategies in the comments section!
We wish you a very happy and prosperous New Year!
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