Need a kick-start to your financial New Year’s resolutions? There’s no need to make it complicated, says Ashley Feinstein Gerstley, author of the upcoming personal finance guide book “Financial Adulting—A 5-Step Guide to Adulting with Your Money.” A solid checklist can help you get moving on the important things you may have been putting off. “When we make New Year’s resolutions, there can be a tendency to make big goals that require monumental shifts in our behavior,” she says. “Don’t get me wrong, I’m a fan of big goals – but for greater success we want to break those goals down into small, realistic and manageable steps.” Here’s how to start getting your finances in order in 2022.
1. Start with a budget
Yes, it may sound snoozy, but Feinstein Gerstley says it’s a must-needed tool to track your paycheck and make sure it’s going to the places where it needs to. “Budgets get a bad rap but they are just a plan for where our money will go once it comes in,” she said. “Think of your budget as a way to decide how to allocate your money in the ways that will make you the happiest in the short and long-term.” In other words, think of your budget as a way to take charge of every cent of your hard-earned money and make sure it’s working toward the things that keep you secure (your important bills), debt-free (read our guide on how to get out of debt here) and happy (your goals and dreams). Some budgeting apps to consider:
1. Personal Capital: Forbes gives this free money tracking and budgeting app its highest score among “best budgeting apps,” at 4.5 out of 5 stars, noting that it’s particularly good for investors.
2. You Need a Budget (YNAB): This app is pricier at $14.99/month, but offers a deep look at your spending and saving. CNBC notes that this app is the best one for those who want to get serious about budgeting.
2. Build your emergency savings fund
The pandemic has shown us all the importance of having easily accessible savings in the form of a rainy day or emergency fund. How much should you have stored up? Pam Capalad, a financial planner and founder of Brunch and Budget, advises taking a look at your bare bones bills (like food, housing, basic utilities and transportation) and keep 3-6 months of that number in your savings. You need to keep this money in an account that has liquidity, like a high-yield savings account, so you can access it quickly when …….