With the new year rapidly approaching, many people have begun thinking about their new financial goals and budget. While this can feel like a daunting and overwhelming task, setting aside time to evaluate how you spent and saved this past year can help you determine your plans for the upcoming year, such as if you should be reallocating money towards different expenses.

Between the ongoing pandemic, a fluctuating market, and general life changes, you want to be well prepared and equipped to manage your money and meet your goals. Here are some tips to help you plan your finances for 2022:

1. Evaluate debts and bills from the past year

One of the best ways to gauge what your financial situation could be in this upcoming year is to comb through your savings and spending from the previous year. Looking back on this past year, what is it you’d like to do differently moving forward? What types of reoccurring expenses can you expect to budget for and what expenses were unexpected? Evaluating your previous costs can also give you an idea of how much you spent per month and help you plan accordingly to help try and avoid any surprise increases in spending. Overall, looking back on 2021 can help set a good benchmark for how to structure your budget and goals for 2022.

2. Align your financial goals with your life goals

While we cannot always anticipate life changes, we often have life goals that we hope to accomplish year to year. Maybe in the new year you’re hoping to change jobs, move to a different city, travel more, start a family or go back to school. While these plans are likely to impact your finances, you shouldn’t have to sacrifice your life goals for the sake of your financial goals. Instead, setting a timeline for certain accomplishments can help you properly save and budget for these bigger changes in the upcoming year.

3. Prepare for the unexpected

These past few years have taught the importance of preparing for unexpected events. As a result, it’s good to structure your finances to support anything that could happen. If you haven’t already, it’s a great time to start building an emergency fund. Start small by setting aside money each month and building up until you have between three to six months’ worth of living expenses covered. It’s also important to either revisit your will or begin building one. While this can be a difficult conversation to have, it’s a good resource for your loved ones to access in the case of an emergency to manage your assets and property in the specific ways that you’d want.

4. Make sure you have an efficient way to record income and spending

To help keep yourself accountable and on track with your financial goals, it’s important to track what you spend and save in the upcoming year. Having these numbers logged will make it easier for you to review week to week and month to month. Keeping records will also benefit you when it comes time to repeat your budgeting process at the end of next year. Whether you prefer pen and paper, or you’ve gone digital, there are numerous resources and apps that can help track your finances throughout the year.

5. Constantly evaluate

Being proactive when it comes to your money is great. However, things are constantly changing in our lives which can reflect in our finances. Taking these steps now will help set you on the right path in the new year, but it’s important to stay flexible as our needs and priorities change. Instead of only setting a year-long plan, consider what your short-term financial goals might be. Schedule check-ins every three months or so to help evaluate the ways that your budget is working great and where it could be tweaked for improvement. It’s okay that it’s not perfect – getting started is a great step.

At BGAF, we’re here to help you financially succeed in the New Year. Send us a message today to start working on your financial goals tomorrow.