With every year, there is a new opportunity to make smart financial decisions. For this year, resolve to develop good financial habits with some 2022 financial planning resolutions!

1. Write down your goals. It is so much easier to make your goals a reality if you’ve written it out. Remember the SMART acronym—make the goals Specific, Measurable, Attainable, Relevant and Time-based. Then make a list of everything you can think of doing to get you to that goal. These smaller, bite-sized goals are something you can do every single day that moves you toward your major goal!

2. Build your Emergency Fund. If you don’t have an emergency fund established already, consider opening an online high yield savings account–even if the interest rates aren’t as spectacular as they used to be. The point is to have some funds easily accessible with no market volatility. You’ll want to build toward a 3- to 6-month reserve of living expenses, but don’t let that overwhelm you if you can’t fund it all at once. Get the emergency fund account open and start with a small amount if that’s all you can do right now. The important part is to make it a habit to contribute to your savings every month.

3. Create a pay-off plan for debts. First, stop digging the hole and avoid situations where you are perpetually accumulating debt. To start the pay-off plan, list all your debts and include the outstanding balance, the interest rate, the minimum payment amounts and how much extra monthly you can put toward paying off debt. Pick one debt to target eliminating at a time (while for the others, keep paying the minimum amount to be in good standing). Once that first debt is retired, focus those extra payments on the next debt on your list and so on. It may require reducing your discretionary spending to make it happen, but consistently paying more than the minimum payment every month will eventually get you debt-free.

4. Review your beneficiaries. With any life event—marriage, divorce, new kids (or grandkids!) or death—you may want to alter your beneficiaries. Check who is listed as your beneficiaries on your retirement accounts (primary and contingent), bank accounts with a ‘TOD’ (transfer on death), annuities or life insurance. Review your trust beneficiaries (and successor trustees!) if you have a trust to make sure these are current. Do this as an annual check to make sure nothing slips through the cracks!

5. Review your insurance policies. Insurance provides protection in the event that something disastrous happens to you or your family. Do you need additional coverage or are you paying more than what you need? Make it an annual practice to read through your home, auto, life, umbrella, and disability policies and determine if anything needs changing. Hopefully, you’ll never need to use the insurance, but you’ll be covered if you do.

6. Create your will. Many procrastinate creating a will, but it’s important to think about what is best for those who you’ll left behind. Make 2022 the year you’ll get one done! Creating a will allows you to name a guardian for your minor children as well as name who will receive your property. Review your will every year in case your situation changes. Don’t forget, you can always change or create a new last will and testament.

These habits can help set you up for a new year of financial success. Make this a priority for your own financial health and happiness in 2022!

Cynthia Flannigan
Cynthia Flannigan

Cynthia made the shift to financial planning to guide clients through making good financial decisions through both grim and exciting changes in life. More than anything, she thrives on helping people. She obtained her CFP designation in 2008 and completed a masters in financial planning and taxation at Golden Gate University.

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