Improving Your Finances
2022 has begun, and for many people, the priority this year will be to improve their finances or, at least, stabilize them. If the past couple of years is anything to go by, it just might be another uncertain financial year for many people, and it’ll help to have another income stream to improve your finances. Whether you’re looking for a simple side gig to supplement your job or want to create an entirely new venture, here are some money moves worth making to improve your finances in 2022.
- Have a solid emergency fund
An emergency fund is exactly what the term suggests – money to tap in case of any financial uncertainty. Without an emergency fund, you may be forced to rack up piles of debt when your regular source of income takes an unexpected hit. While experts recommend saving at least three to six months’ worth of your monthly expenses in your emergency fund, you can save way more if you can afford to. The most important thing here is to ensure that your funds are easily accessible whenever you need them. Determine where your savings also stand as this year starts, and do your best to boost them as quickly as possible if they fall short.
- Increase your retirement plan contributions
Whether you’re already contributing a lot or just a little, you should consider now the best time to increase your retirement plan contributions. The great news from the IRS is that you can now contribute $20,500 as an employee and $61,000 as a business owner to a 401(k) in 2022. The most important hing is that you’re contributing enough to your 401(k) to benefit from the full employer match.
- Create an extra income stream
If your current income makes it difficult to save, you might want to consider creating extra sources. Depending on your skillset and job schedule, you can start a quick side gig. Take the time to research side job ideas and choose the options that are a good match for you.
But creating extra income isn’t always about picking side hustles. If you already have some money saved up, you can consider various investment opportunities that will help you rake in short-term or long-term profits. For instance, you can consider forex trading as a way of boosting your income. Various multi-asset platforms like MT5 are specially designed for trading Forex and CFDs.
- Manage your debt
If you’re dealing with high-interest debt, you must take care of it as soon as possible. But, of course, that’s easier said than done in most cases. But creating an aggressive plan that prioritizes debt payment is the first step you need to take. For instance, if you depend on credit cards for most of your purchases, you can expect your financial situation to get worse, as rates are poised to go up. Credit card debt does not come with tax deductions and costs more interest on other debts than paying out-of-pocket purchases. You may also wonder how many loans can you have, just make sure you manage them properly.