Top 10 Financial Resolutions for 2022

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Hello 2022! A new year often brings a new focus on goals, priorities and resolutions. If you're looking to make financial goals a priority in 2022, here are 10 really great New Year's resolutions to get you started from Empower Retirement.

  1. Create a realistic budget. Yes, the dreaded 'b' word. If you haven't taken the time to create a budget and track your expenses, you may be surprised at how this simple exercise will help you identify 'holes' in your spending or opportunities to save a little bit more each month. There are plenty of great websites and apps that can help you with this, or the 'old school' method of pen and paper will work too.
  2. Pay off personal debt. How to pay off debt depends on what type of debt you have. Because credit cards often carry high interest rates, and issuers are happy to let you pay for the new big screen TV over decades - with interest piling up along the way - it can be a good idea to prioritize paying off credit card debt.
  3. Raise you retirement contribution rate. One best practice when saving for retirement is to shoot for a double-digit contribution rate. Most studies will suggest 10%-15% to ensure you can replace your current income in retirement. Consider increasing your contribution rate by 1%-2% to get to your goal.
  4. Kick a costly habit. Maybe it's your daily latte or mocha or your weekly visit to Target (I'm raising my hand for this one). The little things can add up. Try to swap your pricey patterns for some good financial habits to put more money back in your pocket.
  5. Build an emergency fund. Accidents happen, basements flood, and cars is full of surprises. Expect the unexpected and create an emergency fund in order to avoid debt and cover unforseen expenses. Conventional financial guidance suggests your household should have enough cash to cover three to six months of expenses.
  6. Talk with a financial advisor. By the end of the year, seek out the guidance of a financial advisor. They can help you determine exactly what your financial goals are, build a personalized financial roadmap, and give you options. In fact, studies show that individuals working with a financial advisor have better retirement outcomes. Don't have a local financial advisor? We would love to help. Contact us here.
  7. Improve your financial literacy. Every weekend or month, download and tune into a different financial or investing podcast. Or, if you're too busy, commit to reading an educational article once a month. Chances are you'll find one tip or new idea to apply to your personal situation. The Allied Blog is a great resource for educational content, check it out.
  8. Calculate your net worth. Your net worth is a good thing to know because it gives you a big-picture view of your financial health. Your net worth is what you own (your assets) minus what you owe (your liabilities). You might be surprised at what you find out if you've never looked at this.
  9. Create or update your will. A will ensures your final wishes will be carried out as you intend. It's really a love letter to your family. Without one in place, your estate could go through a lengthy process know as probate, which involves the courts dictating how your assets are distributed.
  10. Determine your financial priorities. Regardless of whether you're early in your career or nearing the finish line, your golden years iwll be here before you know it. Writing down your goals can help you make progress. Check out the Empower Financial Goals Worksheet to start 2022 off on the right financial foot.

Remember, you don't have do everything at once. Improve your financial health by picking one or two of these to focus on in 2022. Wishing you all the best in the year to come!