With a few weeks to go in 2021, you’re probably more focused on year-end festivities than setting intentions for next year.
But if you’ve got big money goals for 2022, you might want to start thinking about them now. Not only will you be ahead of the pack by the time the ball drops, but you’ll also be giving yourself the freedom to accomplish your goals on your own timeline rather than an arbitrary calendar date.
Below are some tips to set yourself up for success so that, come New Year’s Eve, you can toast to the fact that you’re already making progress on your money goals.
Money goal No. 1: Save more
What you can do now: Review where your money is actually going.
This is a classic goal for good reason. Who doesn’t want to save money and start the year off on the right financial footing? Truth is, it takes time to form a new habit, so rather than go cold turkey on your spending all together, a better first step is to see where your money is going in the first place.
Start by looking over your bank or credit card statements from the past year. If you’re able to sort your transactions, go a step further and examine your spending by category. Do the figures surprise you? Drill down even further and track your spending over the next few weeks. Were there things you spent money on that you could have lived without? Would you have felt better if that money had been set aside for, say, an upcoming vacation or a future down payment?
This exercise isn’t really about spending less — it’s about making sure your money is going toward the things you value. Once you know where your money goes, you can create a budget that reflects where you want to pare down, and which savings goals you want to redirect that money toward.
Money goal No. 2: Pay down debt
What you can do now: Take stock of what you owe.
Paying down debt is a challenge, but there are ways to be strategic about it. Before you do anything, there are a few things to know. For every debt you have, check to see how much you’re paying in interest, what your remaining balances are, and any potential benefits you may get from the debt (for example, you could get a tax break on student loan interest).
From there, you’ll want to prioritize paying down your debt . If you have any credit card debt, you’ll probably want to focus on that first, as it’s likely to have the highest interest rate. Taking stock of your debt now can also help you decide if you could lower your interest rates by transferring balances to a lower APR card, or refinancing or consolidating your debts.
Money goal No. 3: Ramp up retirement savings
What you can do now: Increase your contributions by 1 percent.
If you already have a retirement plan in place, like a 401(k) through your company, consider bumping up your contributions by 1 percent (or to the amount your employer matches, if you’re aren’t there already ). It’s a small amount, which means you’re unlikely to feel much of an impact on your budget. Plus, the earlier you start saving, the more time you’re giving your money to potentially grow.
If you haven’t started saving for retirement just yet, don’t wait until the new year; consider opening a retirement account now. Take time to review your options carefully. You’ll have to decide whether it makes sense to contribute to a Roth or traditional account, as well as how much you can carve out of your budget to contribute. And remember that with an IRA, you have until the tax filing deadline to make a contribution that counts for this year.
Money goal No. 4: Get a raise
What you can do now: Start tracking your accomplishments.
If you were planning to ask for a raise in January, that may be too late. By then, your company’s budget may already be locked down for the year, so it’s a good idea to start building a case now, before any decisions are made.
First, ask your manager or HR department about the timing of compensation decisions . If there’s still time to make your case, let your manager know you’re interested in having that conversation. Then start gathering data about your work wins, such as how you’ve increased your team’s productivity, how you contributed to a successful campaign, or any other big wins that prove your worth — particularly if they went above and beyond job expectations. Doing this kind of due diligence is important because it’s hard to argue with solid facts.
Money goal No. 5: Land a new job
What you can do now: Begin your job search.
Like so many Americans who quit their jobs this year, you may be interested in making a career change in 2022. And while there’s some truth to January and February being one of the best times of year to search for a new job, don’t let that deter you from getting the ball rolling now. Even if the process moves slower than you’d like, you’ll still be ahead of where you planned to be in January — not to mention you’ll have less competition for any jobs you apply to before then. It’s also never a bad idea to get your name and resume in front of hiring managers who’ll have a new budget to work with in January. Don’t be afraid to ask a recruiter for help; they’re not going to want to slow down over the holidays, either.