Wow, another year in the books. It was a crazy one, as seems to be the theme these days. With so much ever-changing, what has not changed is our focus on your finances. With that said, I figured let me do a quick check-in to talk about things we can be doing to kick off the year right with 10 tips for 2022.
Financial Audit for the New Year
Here are my tips to hopefully make 2022 a little bit better financially. Let’s call it your financial audit for the new year.
10 Tips for 2022
1. Max Out Your 401(k)
If you are not maxing out your 401(k), increase your contribution by at least 1%. Chances are you won’t miss it much, and these small little changes can have a massive impact on your finances long term.
2. Adjust to New 401(k) Limits in 2022
If you were maxing out your 401(K) in 2021 ($19,500 if under 50) good news is in store. The limits went up a thousand dollars so adjust your savings to the new limit of $20,500.
3. Lower 2021 Taxes
Just because it is a new tax year doesn’t mean you can’t still lower 2021’s taxes. Still, time, until April 15th, to make an IRA contribution for 2022.
4. Investment Allocation
Look at your investment allocation. This is the time of year to do a quick gut check. Did you allocate the right amount of risk for you? Did things get out of whack or have your thoughts changed? This is a great time of year to adjust things to be in line with your goals.
5. Max Out Your HSA
Max out those darn H.S.A’s would ya! $7,300 to be exact for a family you can get in for the new calendar year. I don’t care how you do it but as Nike would suggest just do it!
6. Plan Out Big Expenses
Look at your big expenses for the year and craft a plan. I do this every year and it works brilliantly. I sit down and say OK so this year I am going to donate X to charity, we got these 3 vacations planned, want to do these 2 house projects, etc. Then I make sure I have a sense of the costs for each and budget/allocate funds aside for them. For me, I’ve been doing it so long I am running a year ahead of target. This year’s bonus I plan to set aside most of these funds for the upcoming year.
7. Take Time Off
Plan time off! I just got done taking 2 weeks off to recharge the battery at year-end. There is literally no better time spent. This is time I got to regroup my thoughts, spend time with my amazing wife and kids, and let my brain rest. These vacations are so critical to our happiness and mental health. What do you have planned this year? If nothing, take time to figure it out before the year gets away from you.
8. Rethink Your Goals
What is your 10/3/1 year goal? This is a great time to think through your personal, financial, and professional goals. Start with the 10-year goal for each. What do you want to accomplish? Where do you want to be? Alright, now move to your 3-year goal. To accomplish your 10-year goal what progress needs to have happened in 3 years from now to be on target? Now, what balls need to be set in motion this year to start making headway? I do this every year at work and personally. A lot of my/our success I attribute to this exact process. I can’t take full responsibility as it comes from my work bible Traction from Gino Wickman. If you want a fantastic read for your business, give it a go.
9. Don’t Delay the Unpleasant Tasks
Stop delaying the unpleasant stuff. Have you been saying to yourself for years we need to get a will? Or know you are underinsured but simply lazy in getting the proper coverage? Now I totally sympathize as these things are unpleasant and seemingly unnecessary. That is until they are 100% necessary! Please don’t be the person who wants more car insurance after they get in a car accident. Address these unfun topics as the repercussions of not doing so can be truly catastrophic.
10. Audit Your Security
Do a security audit. Every year more and more individuals call me up that they have been hacked or their information has been stolen. This can cost a lot of time, and money to say the least. There are simple things we can do like not send sensitive information and buying a shredder for your home. Additionally, I am a big fan of password management systems like Lastpass or Dropbox. Also, you can consider using a service such as Lifelock to monitor your activity.
Whether you take 1 or 10 of these suggestions to heart, I can only hope you slow down for a few minutes. Think through what you want to accomplish and how you can make strides this year to better position yourself for financial and life success.
Let’s make this the best year yet! Stay wealthy, healthy, and happy!
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