In the words of US President Theodore Roosevelt, “Believe you can and you’re halfway there!” That’s why setting financial goals at the beginning of the year is so important. If you don’t set any financial goals, the chances are that it will be really difficult to make significant changes to your finances.
Here are five ways to smash your financial goals in 2022 and start improving your finances.
1. Set a realistic budget
Sitting down with your partner and setting a budget is probably the biggest thing you can do to improve your finances and smash your financial goals. There are loads of budgeting apps and tools you can use to help you.
Don’t forget to include saving for irregular bills and annual costs like Christmas and holidays, and try to set aside some personal spending money too.
You should look at your budget each month to see how you’re doing and consider whether adjustments are needed. For example, you may want to increase your budget in areas where you’re always overspending. Budgeting for four takeaways each month is better than having no budget and ending up buying 10.
2. Educate yourself on your finances
Most of us, myself included, left school knowing more about oxbow lakes than about starting a pension, paying off a credit card or investing. Make 2022 the year you start getting educated on your finances so you can smash your financial goals.
There are loads of good websites, blogs and books you can read to find out more.
3. Build up an emergency fund
The last two years have shown that we never know when a financial emergency could be lurking around the corner. That’s why it makes sense to build up an emergency fund to cover a period of unemployment, illness or another emergency. Most experts recommend saving at least three to six months’ worth of expenses in a cash savings fund.
Building up those savings can be hard work, but doing so will help you feel more financially secure. You won’t have to rely on a credit card if financial disaster strikes, and you can keep on track with your financial goals.
4. Join your workplace pension
If you haven’t done so, then make 2022 the year you join your workplace pension scheme.
With tax relief and employers’ contributions, you can actually double your pension contributions. For every £80 you pay in, the government will add another £20 in tax relief and your employer will pay in at least another £60. That means your original £80 will immediately turn into £160. It’s a great way to build your wealth and smash your financial goals.
5. Get into good everyday financial habits
It’s the little things we do that make a big difference to our finances over time. That’s why getting into good financial habits is the key to improving your finances and smashing your financial goals in 2022.
Insurance comparison and personal finance experts Quotezone have suggested five simple everyday things you can do to improve your finances:
- Shop around for cheaper tariffs – you may not have the cheapest car insurance, home insurance, phone bills or energy bills if you don’t shop around. Be careful when shopping around for energy deals at the moment, though, if you’re on a variable rate. Some fixed tariffs are actually more expensive than a variable rate, which is currently capped.
- Use less energy – turn your heating off an hour earlier and on an hour later to save money on your fuel bill and see if you notice the difference.
- Avoid single-use plastics – taking a reusable coffee cup will save you money on your takeaway coffee. Or, even better, take a thermos flask.
- Eat more healthily – cooking from scratch rather than ordering takeaways can save a lot of money. I use simple recipes when I’m in a rush like Jamie’s Oliver’s 5 ingredients.
- Stop smoking – if you’ve struggled to quit, then make this the year! The average smoker spends £5,000 per year on cigarettes, so quitting could make a big difference to your finances.
Could you be rewarded for your everyday spending?
Rewards credit cards include schemes that reward you simply for using your credit card. When you spend money on a rewards card you could earn loyalty points, in-store vouchers, airmiles, and more. The Motley Fool makes it easy for you to find a card that matches your spending habits so you can get the most value from your rewards.
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About the author
Alice is a Suffolk-based personal finance writer specialising in pensions, tax, investment and small businesses. She is a qualified Chartered Accountant and has previously worked for KPMG London and Tesco Plc.
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