Having a difficult financial year can be highly frustrating whether it’s that you have some credit card debt, or are terrible at savings, or were not able to buy yourself the things you planned to within 2021. It can be disappointing to see that you failed to meet your financial goals for a whole year.
To improve and manage your finances better in 2022, you may want to educate yourself better on how to manage your finances. You will be surprised to know that some of these ways are actually very simple. Here are 7 insane simple ways to manage your finances in 2022:
- Set financial goals for yourself
The first thing you want to do if you are looking to have a better financial year in 2021 is set a financial goal for yourself. The best time to do this is before the end of 2021, before the next year even begins.
To set financial goals for yourself, you may want to evaluate your financial standing and analyze where you went wrong this year. You will also want to understand your priorities for the coming year and plan accordingly. A financial plan goes a long way in improving your situation.
- Understand your financial standing
As explained, in order to set financial goals for yourself, the thing you are going to want to do beforehand is understand your financial standing.
This does not mean just knowing where you spend your money and having a rough idea of how much is being spent on what purpose. It involves crunching the numbers and figuring out exactly how much money is being spent, and where. You need to take into account even the smallest of expenses.
- Look for additional incomes sources
In the current economy, the wisest thing you can do and possibly even the best thing you can do to manage your finances better in 2022 is to look for other sources of income for yourself.
It is now becoming more common than ever for people to pick up freelance projects on the side in addition to their regular job. No matter how small your side hustle is, it can still be a huge help, especially for someone who is not satisfied with their current financial management.
- Pay off your debt
While you still have a debt to your name, it can be difficult to improve your financial standing in other ways. If you are looking to manage your finances better in 2022, you may want to start off by paying off your debt.
There are a number of ways you can speed up your debt pay-off process, which include getting an interest-free plan, hiring a debt management company, and many other simple yet smart strategies.
- IVA
IVA stands for Individual Voluntary Agreement. It is something you will want to consider using as a part of your financial plan in 2022 if you are in debt and are looking to pay it off as soon as possible to improve your financial standing.
IVA involves the signing of a legal document between you and your creditors. As per this agreement, you are given a fixed and reasonable time to pay off your debt. During this time, your creditors may not approach you or coerce you into paying it off.
- Save up for big purchases
A big reason you may be unsatisfied with how you managed your finances in 2021 could be that you were unable to buy yourself the things on the list of things you wanted to purchase before the end of 2021.
If that is the case, you may want to consider saving up for bigger purchases rather than just waiting for the right time to make the purchase. A little saving every month goes a long way in helping you collect the huge sum.
- Set up an emergency fund
Oftentimes, we have the perfect financial plan. Everything is going well and you are happy with your financial standing until some kind of emergency occurs and suddenly, you find yourself in a bad spot financially.
This emergency situation maybe some health issue, a loved one needing a loan, or a huge loss in business. Either way, you need a recovery plan. Before you come up with one, you need an emergency fund to help you deal with the emergency situation and bounce back.
To prevent ending up in a tight spot, you may want to start setting up an emergency fund sooner than later.