Start new year with achievable financial resolutions

Photo: Contributed

Happy New Year. I wish everyone a happy, healthy and prosperous 2022!. I hope that this year brings us back to a little more normalcy and back to our pre-pandemic way of life.

And while you may not be able to personally do anything to bring this pandemic to a conclusion, you can take steps at the start of a new year to take a look at your financial situation and what changes you can make to improve it.

For this week’s column, I wanted to suggest some simple and easy to achieve financial resolutions that you can actually do to start the new year off right:

1. Review your subscriptions—Pull up your bank and credit card statements and make a list of any monthly subscriptions that you pay for. These include things like Netflix accounts, gym memberships, music streaming and likely many more. Now figure out which ones you haven’t used in awhile and cancel them. Don’t hold on to subscriptions “just in case” you use them again. You can always re-subscribe if you really want to.

2. Use anything set to expire—Create a list of any credits or points that might be expiring in 2022 and make a plan to use them. Many travel related credits were rolled over for another year due to the pandemic but some of these may expire soon. If you don’t plan to use them for travel, see if the points can be redeemed for something else instead.

3. Review last year’s spending—While this may seem like a daunting task to start, it really won’t be too hard once you dive in. Create a rough budget of where you spent on what in 2021 and see if there are any areas that can be trimmed in the coming year. Sometimes visually seeing where you spend your money is quite the surprise and once you are aware of areas of high spending, it is easier to make adjustments.

4. Take charge of your debt—Update (or create) your list of all debts that you owe and what terms and interest rates they carry. Pay only the required minimum on every debt except for the one with the highest interest rate and focus all extra debt repayments to that one only. Once it’s paid off in full, move extra payments on to the debt with the second highest interest rate.

5. Update your financial plan—If you have a comprehensive financial plan already, the beginning of a new year is a great time to update it. And if you don’t yet have a plan, now’s the time to create one. A proper financial plan outlines where you are today, where you’d like to be in the future and details exactly how you will reach those goals. If your “plan” is little more than an investment statement, it’s time for an upgrade…

While the above steps can be done at any time of the year, the start of a new year is a great time to schedule a check-in and get your finances on the right track.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.