How to be Financially Successful in 2022
While not everyone shares the same financial needs, the majority of people have goals they want to attain in 2022. Regardless of the end goals, there are several steps anyone can take to be financially successful in 2022. Here are just a few of the many financial strategies to use in the coming year to attain financial security.
Stop Overspending on Non-Essentials
Few people track their spending, and most of them spend more than they realize on non-essential items. While the example of spending too much on fancy coffee has been used many times in the past, it’s certainly relevant. A latte at a local coffee shop can easily cost more than $5.00, which means buying a cup of coffee on the way to work five days per week can add up to well over $125 per month when a tip is added.
While it’s important to take a break now and then, avoid going out for meals whenever possible. The prices at restaurants are going up steadily, so the cost of eating out two or three times per week can easily equal a monthly electric bill. Cut those trips to the neighborhood bistro and learn to cook quality meals at home. Doing so is less expensive than eating at restaurants and is usually far healthier.
Create a Budget
Next, take the time now to create a realistic budget. Total your income from all sources (after taxes and other deductions) and create another list with all your payment obligations. This can be difficult for some people, especially those with irregular incomes, like commissioned salespeople. However, it’s important to be as accurate as possible when establishing your net income and totaling those monthly obligations.
Don’t forget to include setting aside funds for insurance premiums and other payments that are sporadic. If your car insurance costs $800 per quarter, you’ll need to set aside one-third of that amount every month to make sure you’re able to make the payment on time.
In some cases, utility companies allow customers to average their payments, which avoids dramatic changes in electric or gas bills when the weather changes. If your utility company doesn’t have such a plan, you’ll need to consider how those fluctuating costs will impact your budget. If you want to be debt-free at the end of the year, make your budget as accurate as possible.
Fund an Emergency Account
One vitally important component of your budget should be funding an emergency account. No one can predict when a major car repair, appliance replacement, or medical bill will decimate your budget, so it pays to set aside enough money to cover a substantial unexpected bill.
So, how much should be set aside? There is no cut-and-dried answer to that question, as every person’s situation will differ to some degree. If you’re single, rent a modest apartment, and take public transportation, your financial requirements will differ from an individual with three children, a large mortgage, and two cars. However, financial experts recommend saving enough to cover all your payments for at least two or three months.
Most areas have financial experts available at low or no cost to provide advice if you’re unsure how to budget for emergencies. Most of those experts recommend reviewing your financial needs, including your emergency fund, frequently. Consider how recent changes in your life could impact your income or expenses, and revise the budget as needed to reflect those changes.
Pay Off Old Debts
Paying off old debts is also high on the list of recommendations most financial advisors suggest. Credit card interest is lethal to a budget, and high remaining balances result in substantial interest charges. Make it your goal to eliminate old debts and credit card debt. Avoid buying anything that’s not necessary until those old debts are retired.
Rather than incurring new debts, save the money to make a purchase rather than simply buying an item because it’s on sale. That “savings” from the lower price will quickly be eaten up by interest charges if the item isn’t paid for using cash.
Consider a Side Hustle
If you don’t see any way to get ahead with your current paycheck, explore ways to add more income. Consider taking a part-time job or starting a small business on the side. Both are common ways people use to generate more income to pay debts or set money aside for future expenses.
Remember that it’s not necessary to commit to a side hustle for the long term, as it may be easy to live comfortably once some debts are eliminated. However, many people keep side jobs for years, as they like the people they meet and enjoy having the extra income. How and when you take on a side hustle will depend entirely on your individual needs and goals.
Take Classes to Improve Your Job Skills
Today, many companies provide employees with continuing education options designed to enhance their skills. Even if your employer doesn’t provide an education benefit, explore ways to take classes that will improve your skills and increase your value to an employer. Those extra skills can lead to a higher salary with a current employer or make you more attractive to a new one.
Some educational opportunities don’t require a major time commitment, but others may take two or three years to complete, so plan accordingly. Most employers support employees that want to advance their careers and may make allowances that make taking classes easier.
Getting Ahead Isn’t Always Easy
There are times when paying off old bills or dealing with new financial challenges won’t be easy. If, for example, a major expense occurs before you’re able to establish a sufficient emergency fund, borrowing money to resolve the problem may be necessary. At King of Kash, we understand that life isn’t always simple and work with borrowers to make it through hard times.
If you must borrow money to handle an emergency, make sure you repay the loan on time so your credit score improves rather than suffers. Here again, careful budgeting will be crucial to ensure all your obligations are met on time. Working with a lender from King of Kash that understands your situation will make it easier to move toward your goal of financial independence. A signature loan may be all it takes to get past any hurdle on your path to a secure financial future.
Cary Silverman is a consummate entrepreneur having sold multiple companies during his 20 years of business experience in the financial industry, but for him, it isn’t about the money. His success is rooted in his passion to focus on doing something better today than it was done yesterday. These days, he’s the CEO of Waldo General, Inc. that oversees the operation of King of Kash.