Consider adding some financial goals to your list of resolutions as you prepare for the New Year. According to People Magazine, seventy-three percent of Americans made a money-related resolution in 2021. Americans have wanted to save more money since the early 2000s, improve their credit scores, and create a budget since the late 2000s.
Here are five financial New Year’s resolutions from financial advisory firms that are dynamic and sophisticated. Everyone can set financial goals, whether you’re just getting started or part of the FIRE (financial independence, retire early) movement.
- Consult a financial advisor
You can learn finance by discussing your current situation and goals with a financial advisor. What are your goals? A financial advisor can also help you structure your finances to enable you to achieve your goals.
Less than a month will remain until 2022. Meeting with your financial advisor before the new year would be a good idea if you can. You can then set some of your New Year’s goals based on what you learned in your meeting.
- Repay your credit card
You should think about making a plan to pay off your credit card debt if you start the new year with debt. UAE credit cards have an average interest rate of 37.75 percent. You’ll have to work extra hard to pay off interest fees if you only repay your credit card minimum each billing cycle.
If you have a credit card debt, you should pay it off as soon as possible, even if you have to cut back on spending and invest less for a few months. It’s because you’re likely to accrue more interest on a credit card debt than any other investment.
- Create an emergency fund
A financial goal for 2022 is crucial for many Americans because they don’t have an emergency fund. You won’t get into further debt if an emergency arises, including a car accident or medical bill. You will meet your financial goals if you have an emergency fund.
Save up one month’s worth of living expenses, to begin with. Save up to three months’ worth of rent once you’ve reached that goal. Your ultimate goal should be to save six months’ worth of expenses, saving 10-15% of your income each month. A liquid emergency fund is intended to be used in an emergency. However, it may make sense to invest some of your short-term savings once you reach a reasonable amount. It will increase your savings more rapidly.
- Plan your monthly investments
Especially now, financial markets are volatile. You can deal with that volatility by investing regularly or averaging your investment costs over time. You invest every month when the markets are high, or you invest when they are low. Markets have an upward trajectory over the long run so mistiming will have less impact. You also give your investments time to appreciate and grow with compound returns by investing regularly. A great tip for investing is to set up automatic bank transfers.
- Set up a retirement account
You should start saving for retirement asap. By the time you’re 67, you should have saved ten times your salary. Such a sum may seem daunting to most people. You are more likely to hit your retirement savings goal if you start early. Retirement savings goals can differ greatly from person to person. Your retirement age and the lifestyle you want to lead will affect how much you will need. While some retirees plan to live on less, others hope for a retirement full of adventures and travel. You’ll need to save more aggressively in retirement if you anticipate more expenses.