If you’re looking for ways to improve your finances in 2022, but aren’t sure where to start, WallHub published a list of 10 finance-based resolutions earlier this month.
1. Make a realistic budget and stick to it
According to WalletHub, people who want to make a budget should start with a list of all their recurring expenses and rank them in order of importance, with housing, food and health care in the top spots. Then, you should cut the expenses that have the lowest priority until your income exceeds your spending.
WalletHub also recommends keeping track of your monthly spending to ensure that you’re following your budget throughout the year.
2. Pay bills right after receiving your paycheck
WalletHub reported that this strategy is helpful for budgeting and knowing what you can actually afford. To follow this resolution, WalletHub recommends setting up two automatic monthly payments to your credit card: one for the day after payday and the second for a few days before your monthly due date.
3. Add one month’s pay to your emergency fund
According to WalletHub, building up an emergency fund "should be one of the first orders of business for any financial makeover" in case of unexpected job loss or unexpected medical expenses.
WalletHub reported that the best way to build an emergency fund is to "chip away at it over time," rather than try to create an emergency fund overnight. Ultimately, the goal should be to have between 12 and 18 months’ take-home income in your emergency savings, according to WalletHub.
4. Use different credit cards for everyday purchases and debt
WalletHub recommended that people should use different credit cards for different financial needs, such as "using a rewards credit card for everyday purchases and a 0% APR card for balances you’ll carry from month to month. According to the personal finance website, this resolution can help people reduce the cost of their debt and allow them to get the best possible terms on each card."
5. Repay 20% of your credit card debt
Many of the previous resolutions can help you make sure you don’t incur too much future debt, but to help you pay off your existing debt, WalletHub recommended using a 0% balance transfer credit card and a credit card calculator to make a plan. Because it’s best to start small, WalletHub recommends trying to repay 20% of your credit card debt in the new year.
6. Get an A in Wallet Literacy
Getting up on your financial literacy can help you make better decisions in the future, so WalletHub recommended that people take its WalletLiteracy Quiz and to spend the year studying up on topics you struggled with. WalletHub suggested trying to get at least an A- by 2023.
7. Sign up for credit monitoring
Though you should be regularly checking your credit reports, WalletHub recommended also signing up for free credit monitoring, which will notify you when there are important changes on your credit report.
8. Make sure you have enough insurance for a catastrophe
In the upcoming year, WalletHub recommended that people should make sure they have enough insurance coverage – including life insurance, disability insurance and enough health insurance – to make sure they and their dependents have a safety net in potential worst-case scenarios.
9. Focus on physical health, given its strong connection to financial health
Aside from making sure your finances are in order, WalletHub also recommended taking care of your physical health through exercise and other healthy practices.
By doing those things, you could decrease your health care costs and make wiser financial decisions focused more on the long term, according to WalletHub.
10. Look for a better job
WalletHub also recommended improving your finances by getting a better job with higher pay or better opportunities. The personal finance website also reported that if you get a good remote job opportunity, you could "save on commuting costs, avoid risking your health" and even allow you to move to a place with a lower cost of living – which would also help you save money.
WalletHub
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