It is joyous as well as unbelievable that we are just a few weeks away from 2022. As we reach this time of year, many people will reflect on what they have accomplished this year. While others would think about what they will like to do with their money in the months to come.
If you feel similar, now is an excellent time to get smarter with your finances. You can check in with your assets and plan for the changes you want to make next year.
With that in the notice, here are some pointers that you can follow to save money and get smarter with your expenses in 2022.
Let’s dive in!
1. Review Your 2021 Expenses
Set aside at least an hour to go through your spending for 2021. Go through all the categories to see; have you rightly sub-divided your income in all three sections, i.e., necessities, wants, and desires? Or note that; have you overspent your money on unnecessary things?
After observing all your previous data, you need to decide whether you want to stick with your last year’s budget plan or need to revise and remake a budget plan from scratch.
This is a good reference point for planning for the next year to come. Record your monthly expenses on a Google sheet or use a financial management software like My EasyFi to list out your costs and form a new budget.
2. Create A Backup Plan
Financial inspections should be preserved the same way as annual checkups at the doctor. Everyone should have a backup plan to save themselves from going bankrupt when situations such as pandemics arise.
Spend a few minutes informing the recipients of your investment, financial accounts, retirement plans, and benefits accounts. Also, try to review your state plan and make sure you have:
- A healthcare proxy who can speak on your behalf in a medical situation if you cannot.
- A will establishes whom you want to give your assets to after you die. If you have kids, you can also name the caretakers for them.
- A durable power of attorney who guarantees that someone you trust will pay your bills and manage other financial affairs.
3. Increase Your Retirement Contribution
The maximum contribution limit for 401k increases by $1,000 in 2022 compared with 2021. That will make a total of $20,500 or $27,000 for 50 years and older than that.
If you have a strategy through your employer and can afford to, upsurge your contributions to account for the new confines. Log into your account and activate your donation rate, so you are saving more.
4. Donate To Charity This Year
IRS will soon allow all taxpayers, even those taking the standard deduction, to deduct $300 in charitable contributions from their taxes. If you plan to give during the holiday season, or you have been contributing throughout the year, you can get a slight tax break.
In A Nutshell
“Sometimes we don’t remember to make the time, but it’s critical to touch with base with yourself, your family, and your advisor.” – Sonya Mughal
If you are looking for budget management software, you can contact My EasyFi for a smarter finances planning and savings throughout the year.