Learn How to Get Financially Fit in 2022

by | Jan 4, 2022

A new year is a time of fresh beginnings and hopeful resolutions, especially in the area of personal finance. If you’re looking to slim down debt and bulk up your wallet in 2022, read on for tips to build a more financially fit year ahead.

Set your personal money goals

To get financially fit in 2022, you should begin by setting some personal money goals for yourself. Think about what you are looking to achieve most this year. Do you need to pay down large sums of debt? Build up your savings? Or is learning how to budget for a career change with a higher/lower income something that you would like to work on? Write down each of your goals so that you can create a plan that is tailored towards reaching them.

Create a budget

The next step in building a more financially fit year is to create a budget. To start, compile a list that includes your net monthly income, outgoing expenses, and debts. When creating a budget, always build it around what you can rely on taking home now, even if you hope your situation will improve over the year.

Once your income is determined, make a new column with a line item for each of your outgoing expenses. Fixed bills such as your rent, car, and credit card payments should go at the top. Then, as you go down your list, make sure to include all flexible items such as how much you typically spend on groceries and general household supplies. With inflation on the rise, you may want to add a bit of a buffer in your unfixed category to prepare for the possible uptick in consumer goods. Finally, end your list with discretionary spending like dining out, new clothes, and entertainment. Add up all of your monthly expenses and compare this number to your take-home income. If you have more money going out than coming in, you may need to get a side hustle or cut back on those non-essential items at the bottom.

Pay down debt

When slimming down financially in 2022, paying down debt is another great goal to set. To do this, take a look at the bills from your budget above. If you have the funds to cover it, edit your payments to pay more than the minimum amount due each month. Another way to catch up is to make extra payments on items like your credit cards. Not only will this help you pay down debt, but it could also help you maintain a healthier credit score. If your debt is becoming too overwhelming to maintain, you may want to consider a debt consolidation or speak with a non-profit consumer credit counseling service like DebtWave.

Set aside savings

As a general rule of thumb, consumers should strive to save 20% of their income each month. If 20% isn’t quite attainable this year, set aside as much as you can while comfortably being able to pay all of your bills. Even $5 or $10 a week can add up to some big savings if placed responsibly into a retirement fund like a 401K or any account/investment that compounds interest over time.

Manage your credit score

If you want to achieve a more financially fit 2022, it’s wise to check your credit score {see my $0 credit score} regularly and make improvements if necessary. Excellent credit is an essential baseline to good financial health. By checking and managing your credit online, you may be able to qualify for lower interest rates and more favorable terms – which could save you a ton of money in the long run. If your score is less than perfect, a new year is the perfect time to take control of your creditworthiness. Below are three credit tips to help you better manage your 3-bureau scores and reports in 2022.

Check for your reports for errors

Review your Experian, TransUnion, and Equifax credit reports for errors. If left unchecked, errors such as an inaccurate late payment or fraudulent account can damage your credit for months or even years. If you believe your report contains an error, your best and quickest shot at removal is to file a dispute online.

Reduce your credit utilization

If your credit card debt has gone up in 2021, make an effort to reduce your overall utilization rate. If your utilization rate is over 30%, lowering it could help you achieve more favorable credit.

Monitor your credit online

Due largely to the increase in online communications and transactions caused by the pandemic, consumers could be at a higher risk for cyber scams. If you routinely monitor your credit online, you’ll be more likely to identify and address fraudulent activity before it grows into a bigger issue.

Achieving a financially fit 2022

By following the financial tips above, such as creating a budget, paying down debt, and monitoring your credit online, you can hopefully get a jumpstart on a slimmer debt balance and heftier wallet size for this year’s trip around the sun. Happy New Year!

Disclaimer: Debt Wave is a preferred partner of ScoreShuttle. ScoreShuttle is not a financial advisory firm and does not give financial advice. Always be sure to do your own research and speak to your personal financial advisor to find the best financial options for you.

Liz Richards

Liz Richards

Credit Content Specialist

Liz Richards is a content creator specializing in credit wellness and best budgeting practices. As an in-house ScoreShuttle contributor, Liz transforms complex financial topics into easy-to-digest tips that consumers can use to manage their credit and financial worthiness.

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