There’s no better way to start the New Year than with a list of goals you’d like to achieve. Whether you’re pleased with your current financial situation or wish to improve it, 2022 is a great year to focus on your finances. Here are simple tips to help you save in 2022:
Max Out Your Retirement Contributions
With some planning and persistence, you can max out your retirement contributions. While IRA contributions limits for 2022 will still be $6,000 per year and an extra $1,000 for those age 50 and over, limits for other retirement savings plans have gone up. If you’re saving for retirement with a 401(k), 403(b), 457, or a Thrift Savings Plan, you can contribute up to $20,500 in the New Year. That’s $1,000 more than 2021. The catch-up contribution limit for individuals age 50 and older will remain at $6,500.
Create a Budget
A budget can help you save in 2022 and make the most of your hard-earned money. It’s essentially a spending plan for your income and expenses. As long as you stick to your budget, you increase your chances of meeting your short-term and long-term financial goals. While there are plenty of budgets out there, you may want to consider these options.
- 50/30/20: The 50/30/20 budget is when you put 50% of your after-tax income toward your needs, 30% toward your wants, and 20% toward your savings goals.
- Pay Yourself First: With this budget, you determine how much you earn after taxes and subtract your expenses. The figure you come up with can help give you an idea of how much you can set aside to “pay yourself first.”
Build an Emergency Fund
A financial emergency may impact you at some point in 2022. To ensure you’re prepared, it’s a good idea to build an emergency fund. If you already have one, you may want to continue to contribute toward your emergency fund. If you experience an unforeseen expense such as a large car repair bill, or a medical bill not covered by insurance, you’ll have the financial resources to pay it. Many financial experts recommend you save at least three to six months’ worth of expenses in an emergency fund.
Pay Off Debt
Debt can make it difficult for you to achieve financial security and freedom and save in 2022. If you have credit card debt, car loan debt, student loan debt, or any other type of debt, make 2022 the year you pay it off. Numerous debt relief strategies may help you, such as the debt snowball, debt avalanche, debt consolidation, credit counseling, and debt settlement.
Consult a Financial Professional
A financial professional can help you review your financial situation and determine a strategy for your situation for the upcoming year. Contact us today to get started.
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For those who are looking for financial advice, we realize the available options are many. Deciding who to work with is a challenging problem. At Ward and Associates Financial Group, we know that it is your retirement, and you should have control over it. We offer our experience and knowledge to help you design a custom strategy for financial independence. Contact us today to schedule an introductory meeting!
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