The year 2021 was an up-and-down year for many Americans. No one knows what is on the horizon for 2022, but it doesn't hurt to set goals. Here are some financial goals that could help you get off to a great start in 2022.
Start an Emergency Fun
Whether you've just graduated and have yet to start your dream job or you're a professional with many years of experience under your belt, you need an emergency fund. This is the first point of emphasis that many financial experts point to. If you have no emergency fund, you'll likely have to go into debt when an unexpected expense pops up. A fund of $1,000 is a good start, but many of the same financial gurus that recommend having an emergency fund recommend building it up to between three and six months worth of expenses.
Get out of Debt
If setting up an emergency fund is the first recommendation from most financial experts, getting out of debt is a close second. Whether you look to pay off debt with the debt snowball that encourages people to pay off debts from the smallest to the maximum balance or with the debt avalanche that considers interest rates, paying off debt can pay some serious dividends. If you're able to retire debt early, you effectively get a rate of return that equals the interest rate that you might have been paying. For credit cards with interest rates of 15 percent or more, paying off the debt can be one of the best investments that you can make.
Read Five Personal Finance Books
This recommendation might be surprising, but those who want to learn about science in college have to read books on science. If you're looking to improve your financial literacy, it's a good idea to learn as much as possible about the topic. Much of the heavy lifting has already been done. Some financial experts have gotten where you want to be, and many of them have written books. It's a good idea to pick up a few and read them. If you have a local library, checking these books out for free would be the smartest option.
Start Side Hustling
Side hustles are all the rage, and there's a great reason why. The labor market has improved over recent years, but many people no longer have jobs that will comfortably pay their bills each month. One of the best ways to improve your financial standing is through a side hustle that brings in a few hundred dollars each month. A few hundred bucks could mean the difference between living paycheck-to-paycheck and building up a healthy emergency fund and paying off debt. All side hustle income should go toward improving your balance sheet each month. That means paying off debt or saving for retirement.
Improve Your Health
This might be surprising, but Americans are some of the least healthy people in the developed world. Exercise and healthy diets are not the norms in the USA. This means that the United States has one of the lowest life expectancy levels in the developed world. Healthcare in the US is also more expensive than anywhere else in the world. For those who are looking to save money and build wealth, avoiding costly healthcare bills is a crucial step to take. Just deciding to incorporate a few minutes of exercise into your day can make a difference and can cut down on your risk of serious diseases that can cost a load of money.
These are just a few of the goals that could help you with your finances in 2022. Getting started with one or more could be the step that could radically change your life for the better in the coming year. There's no time like the present to get started.