January 07, 2022
Now that we’re in a new year, it’s time to start thinking about how we can improve for the future and do things differently. One of the best ways to prime yourself for success in 2022 (and beyond) is to explore ways to get your finances into the best possible shape. In a new study on the spending habits of adults in PA, NJ, DE, and MD, residents are looking for a financial reset. Of those surveyed, 56% say they are likely or extremely likely to set financial resolutions in 2022.
While goals and resolutions come and go, a new year means a fresh opportunity to take control of your finances by taking action.
In the recent study, residents were asked to choose their top 3 financial resolutions heading into the new year. Setting a monthly budget and sticking to it was the most popular answer amongst residents, selected by 39%, followed by paying off credit card debt 37%, and limiting spending on non-essential activities, like eating out, which was a priority for 33%.
Budgeting was a higher priority for women in the area than men, with 44% of women choosing it among their top 3 resolutions, compared to 32% of men. Meanwhile, paying off credit card debt and limiting spending on non-essentials were more important priorities for men than women (40% vs. 35%, and 36% vs. 30%, respectively).
If you’re starting off the new year with a list of resolutions, consider adding these financial to-dos:
1. Review & Update Your Yearly Budget
New year, new budget. By doing a yearly review, you can create and/or reevaluate your general financial goals. This yearly assessment is different than your more frequent weekly finance check-ins, because you’re able to establish long-term goals during the next 12 months. If you have never established any financial goals, just think of them as what you hope to get out of your money each year. These goals could be as simple as paying your bills on time each month, or as intricate as creating a savings plan to help buy your dream home. Your yearly budget review should also compare what you hoped to spend, how much you actually spent, and/or if there are any areas of your budget that you can cut out.
You should also use your annual budget audit as an opportunity to assess and allocate your finances for any future big events, such as a wedding, home renovations, or if you’re planning to expand your family. January is also the time when many companies begin open enrollments for health and dental/vision care, 401Ks, and retirement benefits, which you may opt in to participate.
While financial goals can be different depending on the person, no matter what they are, they will hopefully lead to the same outcome: helping you see why you are spending your money in a certain way.
2. Start the Year Off Right with Savings
Now that you have reviewed your budget, looked for ways to cut out the things you don’t need, and have a better understanding of your new financial priorities, you can start thinking about a savings plan. By saving at the beginning of the year, you’re creating a positive habit. Once you start putting money aside, you won’t stop. Some helpful advice to get started on a savings account/emergency fund include:
Starting off the year with saving will hopefully set you on the right path to being secure in your finances in 2022.
3. Build a Suite of Personal Finance Resources to Reference in a Pinch
Make sure you have ready access to financial information that will help when you may need it most. You should have a set collection of resources that will help you answer any personal finance questions quickly and easily. In the Education section of PFCU’s website, you can find a treasure trove of resources to help answer many of your most pressing financial questions, including:
These resources could also be physical files that you have printed out and stored away somewhere to be taken out when you may need them. It’s a good idea to have them on hand so you have peace of mind knowing that if a complicated financial question were to come up, you would be able to easily find the answer. PFCU also offers resources and additional information to its members, and will work with them to achieve their financial goals. For more information, visit pfcu.com.
By using these tips, we hope you set and continue good financial habits that will see you through all aspects of your life.
To view the full research report, visit PFCU’s website.