4 simple things to do with your money now, so you start 2022 off on the right financial footing

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Need a kick-start to your financial New Year’s resolutions? There’s no need to make it complicated, says Ashley Feinstein Gerstley, author of Upcoming Personal Finance Guide book “Financial Adulthood – A 5-Step Guide to Adulting With Your Money.” A solid checklist can help you move on to the important things you were avoiding. “When we make New Year’s resolutions, there can be a tendency to make big goals that require a significant change in our behavior,” she says. “Don’t get me wrong, I’m a fan of big goals – but for greater success we want to break those goals down into small, realistic, and manageable steps.” Here’s how to start getting your finances going in 2022.

1. start with a budget

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Yes, it may sound strange, but Feinstein Gerstley says it’s an essential tool for tracking your paycheck and making sure it’s going where it’s needed. “The budget gets messed up, but it’s just a plan as to where our money will go once it arrives,” he said. “Think of your budget as a way to decide how to allocate your money in ways that will make you the happiest in the short and long term.” In other words, think of your budget as a way to take charge of every cent of your hard earned money and make sure it’s working toward things that keep you safe (your important bills), debt free ( Read our guide on how to get out of debt here) and be happy (your goals and dreams). Some budget apps to consider:

1. personal capital, Forbes gives this free money tracking and budgeting app its highest score among the “best budgeting apps” at 4.5 out of 5 stars, noting that it’s especially good for investors.

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Learn more here

2. You Need a Budget (YNAB): The app is more expensive at $14.99/month, but provides an in-depth look at your spending and savings. CNBC notes that this app is best for those who want to get serious about budgeting.

Learn more here

2. Build your emergency savings fund

The pandemic has shown us the importance of easily accessible savings for a rainy day or as an emergency fund. How much should you have stored? Pam Capald, a financial planner and founder of Brunch and Budget, recommends taking a look at your bare-bones bills (like food, housing, basic amenities and transportation) and keep 3-6 months of that number in your savings. You need to keep this money in a liquidity account, like a high-yield savings account, so that you can access it quickly when you need it.

There’s no need to wait until your emergency fund is top-off before saving for other goals. The important thing is that the money is there when you need it.

3. save more for retirement

When we have bills to pay now, it can be difficult for many of us to invest for retirement. Feinstein Gerstley recommends starting small and saving more as your paychecks increase. For example, if your company offers a 401(k) matching program, put in at least as much as they match or you’re leaving money on the table. “The sooner we start, the more we give our money to grow,” she says. “Just because you’re contributing a certain amount now doesn’t mean you won’t be able to make more later.”

If you don’t have a job that offers you a 401(k), you can always open one and contribute to an IRA or Roth IRA. While it may sound intimidating, there are new low-fee apps and services that make it a lot simpler for beginners. This includes:

1. Improvement, which is rated by NerdWallet with 5 stars, noting that “Better is a clear leader among robo-advisors.” This “base service has no minimum account and charges 0.25% of assets under management annually. Betterment Premium offers certified financial planners a 0.40% fee and unlimited phone access for a minimum $100,000 account,” notes the site. Is.

Learn more about Improvement

2. vanguard Known for its low cost index funds. Vanguard Digital Advisors offers a low fee to get started (0.15% management fee and minimum $0).

Learn more about Vanguard Digital Advisor

4. review your insurance

It’s important to have an insurance check-in once per year, says Feinstein Gerstley, and January is a great time to do so. First, check to see if you have enough auto insurance (this guide can help you determine how much you need), and if you may be able to get a better rate. One study found that switching car insurance can save you $471 a year. You can shop for personal auto insurance rates Here,

Next, Make Sure You Have Your Homeowners Insurance Sufficient Compare coverage, and rates to see if you might be able to pay less.

Don’t have a house? Depending on your policy and what state you live in, a relatively inexpensive renter’s insurance policy, some as low as $12 a month, can protect you against smoke, fire, explosion, theft, vandalism, and other issues.

Next, take a look at your employee benefits and make sure you’re happy with your disability coverage and, if not, see if it makes sense to take out an individual policy.

And finally, look into life insurance if you have loved ones who are financially dependent on you. Not sure how much insurance you need? Consider the DIME method, which stands for Loans, Income, Mortgages, and Education. Add up those costs for the future (multiply this by the number of years you’ll need your dependents for your annual income), and roughly how much life insurance you’ll need. ,We have a tendency to neglect all areas of our money. We’re about to ignore equal opportunity!” says Feinstein Gerstley. “But I would say the most common are the ones that require consistency.”

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