Business

Financial success in 2022 – tips on what works

By: Dale Arasa - @inquirerdotnet

Inquirer Los Angeles / 10:02 AM January 06, 2022

It’s another year, so you have another chance to achieve financial success! Do you want to get rid of debts or accumulate more money for savings? Or earn more every day to keep up with the rising prices? Maybe you don’t want your financial life to survive but thrive in this new year?

Fortunately, the steps to financial success are the same no matter the time of year. You could still use them, even if we’re still dealing with the coronavirus pandemic or its aftermath. What’s more, you’ve come to the right online resource, as I will explain how you can achieve financial success in this year or even the next!

I’ll just jump right into the steps and start setting your short-term and long-term financial goals. Then, I will explain how you can deal with your current money problems, such as planning a budget and getting rid of your debts. What’s more, I’ll show you how to prepare your finances for the future by building your portfolio and your emergency fund.

#1. Set realistic goals

The first step to almost everything has a plan. What is it that you want to change in your finances? Do you have a lot of debt, or do you wish you had enough for emergencies?

Whatever your wishes are, write them down. Then, adjust them into SMART goals that are specific, measurable, achievable, realistic, and time-bound:

Let’s say you want to have more money. In that case, how much do you want to have, and what will you do with that amount? Jot all of these down on a piece of paper or note-taking app.

#2. Check your budget

Now that you have the long-term goals, you need to set the short-term moves that will take you there. You will have to start by checking your current financial situation.

List your expenses and earnings every month and compare them. You can have more money by spending less, earning more, or both. How you’ll do this will depend on your financial plan.

You could start immediately by getting rid of unnecessary expenses, such as that extra YouTube TV subscription. The next methods will take your personal finance even further, though.

Read More: Investing For Dummies 101

#3. Tackle your debts

Let’s proceed with reducing your financial burdens. I understand if you’ve been using your credit cards a lot recently. After all, more Americans have been doing the same.

The Federal Reserve of New York said that US household debt climbed to over $15 trillion in the 3rd quarter of 2021. However, too much debt is never a good thing.

This is why it’s best to keep credit card spending to a minimum. If you have a lot of unpaid balances, you can follow various debt reduction strategies such as debt consolidation.

It combines multiple debts into one that has a lower interest rate. You can do this for all sorts of unpaid balances such as credit cards and even student loans.

If you have serious money problems, you might want to consult a professional. Ask for help from a certified financial planner or financial advisor.

#4. Get a side hustle

You now have more ways to make more money because of the recent remote work trend. Millions of people resorted to working from home while physical offices can’t go back to normal.

Even better, there are many options, even if you’re still a college student. You may also find a similar remote role for your current or past office work.

They’re flexible as well, so you might be able to fit more than one role in your life. That way, you can maximize your earnings. Just make sure you’re not pushing yourself too hard.

#5. Establish a source of passive income

Money doesn’t grow on trees, but it can increase while you sleep! The first option you might consider is depositing funds in a bank savings account. That’s a slow choice, though!

Nowadays, the internet offers passive income methods that yield faster and larger profits. For example, passive income apps invest your money and maximize earnings on your behalf.

What’s more, staking cryptocurrencies is a great way of making more money. Do that with ETH coins or AXS tokens, and you can earn more than 20% APY (annual percentage yield)!

#6. Start building your portfolio

Speaking of cryptocurrencies, that is one of the assets you can invest in at the start of the year. It can put you on the fast track to financial success, but mind its volatility!

You could choose more conventional alternatives such as stocks, ETFs, and bonds to boost your earnings. On the other hand, it could help your retirement plans.

Figure out how much you can submit to an IRA as a maximum contribution. Then, apply for either a traditional or Roth IRA, so you can start building your retirement savings.

#7. Build an emergency fund

Lastly, you should have a savings plan in mind. It should help you build an emergency fund since you’ll need it to deal with the uncertainty brought by the pandemic.

It’s especially important for sudden medical expenses. That’s why you might want to look into flexible spending accounts either from the government or private providers.

For example, you could get one from healthcare.gov. On the other hand, some companies have options with nifty features, such as setting up automatic payments for doctor’s fees.

Of course, your savings account doesn’t have to be just for serious situations. For example, it could help you gather enough money to buy a new iPhone 13 Pro!

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Final thoughts

Financial success means financial freedom, and you can achieve both in 2022. Many people have done it before, even during the pandemic, so that you can do it too!

Remember that the steps I gave you will depend on your determination and discipline. Your road to financial success won’t be easy, but you can truly get there.

Suppose you need more help, the other Inquirer USA articles for additional free money tips. Of course, you should also try checking the other free resources on the internet.