Yahoo Finance 5 steps to set yourself up for financial success in 2022
The dawning of a new year is a time for us to reflect and set some goals for the upcoming year.
Many of us use this time to think about our finances and what we might need to do to align our goals with our spending.
Also read: The surprising secret that will make budgeting easy
Also read: The post-COVID world: an investment outlook for 2022
Also read: 17 biggest budgeting mistakes you’re making
A new year can be a great way to “get on the front foot” of your budgeting, Finder home loans editor Richard Whitten told Yahoo Finance.
And while we don’t yet know what 2022 might throw at us (Omicron, anyone?) one thing we CAN control is our finances.
So, start your year right with Whitten's five steps to get you on the path to financial success.
1. Consolidate your debt
If you’re repaying debt on multiple credit cards, chances are you’re also paying multiple sets of fees, as well as repaying separate interest charges on each of those.
One better option is to move that debt to a zero per cent balance-transfer card. This can help you save money on interest charges from existing credit cards or personal loans.
It can also simplify your payments into one monthly statement and reduce what you're paying in annual fees.
2. Track your spending
It’s hard to set yourself up for financial success if you don't know where your money is going in the first place.
Tracking your spending is key to seeing where you might be wasting your money, and finding opportunities where you can make quick savings.
Budgeting apps can help to keep you accountable for your spending, and show you where you could be saving money by switching to a better deal.
3. Shop around for better deals
No matter how big your savings goals are, you’re probably still going to spend money on the things you want.
Whether it’s getting takeaway once a week, treating yourself to a nice new pair of shoes or taking the family out for a day of fun, make sure you’re shopping around for the best deal.
A good tip is to check the latest sales and deals before you hit the "buy" button. You never know when you might find a promo code that gets you 10% off.
Also consider switching your car insurance for a better deal, and if you’re a homeowner with a mortgage, look into refinancing to a cheaper home loan to reduce your monthly repayments.
4. Review any subscriptions
TV subscription services are one of our most popular forms of entertainment, with 88 per cent of Australians watching at least one.
While a TV, sports or music subscription is pretty cheap considering how much joy it can bring, having multiple can put a dent in your budget.
Rather than giving up your favourite subscriptions entirely you can look at sharing an account with friends and family so you can still cut your costs a bit and enjoy the benefit of subscribing (unless Netflix follows through on cracking down on password sharing).
Many services allow you to cancel and restart your subscriptions on a month-to-month basis so the trick is to choose a couple each month that you want to use and pause the others until a later date.
5. Don't be too hard on yourself
If your goal is to buy a house, this probably isn’t going to happen in a single year. Instead, create a detailed timeline and break your plan down into manageable goals you can hit monthly or weekly.
If you fall off the savings bandwagon, don’t give up. It’s normal to slip up occasionally, but you shouldn’t let this discourage you from persevering.
Instead, aim to get back on track as soon as possible, and don’t dwell on your “lost” progress.
Keep looking forward.
Follow Yahoo Finance on Facebook, LinkedIn, Instagram and Twitter, and subscribe to the free Fully Briefed daily newsletter.
