Make a clear picture of your goals
As you enter the new year with high expectations and a fresh spirit it is important to reflect on 2021. Did the year go as you wanted? Are there any changes you would like to make? What are the areas you would like to improve? Take a moment to make a lucid picture of your goals.
How you can do this-
Write down your goals and their expenditure
● Buy a new property
● Go on an international vacation
● Make a new emergency fund
● Start investing
When you are in the middle of shaping your independent finance inspiration is something you didn't know you needed. One of the best ways to find inspiration is to read financial stories and books, listening to podcasts. Analyzing them, understanding the risk factors, learning from the mistakes.
Talking to family and friends about finances could be a real deal, including them in your financial goals will create accountability, and involving more people could lead to more ideas and support.
Look into life insurance
Life insurance is a financial cover for unfortunate times which can play an important role in your financial plan. Few of the main reasons to have life insurance are:
Safeguarding family, they have immediate financial support in the event of your demise.
Have a savings plan for the future so that you have a concrete stream of income after retirement.
Ensure that you have extra income when your earnings are reduced due to serious illness or accident.
Assuring other financial contingencies and lifestyle changes/requirements.
If you already have life insurance then have a habit of checking it regularly. As your life changes, your policy must be still well-suited in your situation. Big events in life like the growth of family, change in career, etc. may cue in more-or-less coverage. Additionally, keep beneficiaries up to date.
Build reliable passive Income
To achieve real financial independence passive income can be a great way to help you. Passive income can either come from a side hustle or a smart investment model. If you are going to do it then do it right building a strong passive income stream requires effort and capital initially. The brighter side is after overcoming these obstacles you can sit back relax and enjoy your rewards.
Passive income can be as much or as little and can be generated via many sources.
Most used ideas for passive income include -
REITs (Real Estate Investment Trusts)
Create a blog or YouTube channel
Study the financial ABC’s
Lack of financial literacy can lead to a variety of problems, including the accumulation of enormous debt burdens as a result of bad spending patterns or a lack of long-term planning. As an outcome, you may have credit problems, bankruptcy, foreclosure, or other undesirable effects. Financial literacy can help you understand credit cards, avoid debts, way accounts works, budget expenses, etc.
As finance decision-making grows more complex the need for literacy comes in handy.
Key points to improve your financial IQ
● Manage debt.
● Monitor your account.
● Check your credit score.
● Create monthly, year budgets.
● Handle borrowing.
● Gain knowledge about taxation.
If you already know a little about financial there is always room to grow more. Keeping up with new financial trends and getting help from a financial advisor will surely allow you to expand your vision.
Take a look at your saving plan
Now that Christmas is over and year-end is around the corner this may be a good time to look back on your income and expenses. Make sure you are accomplishing your saving goals. 10% of your income is generally recommended for savings, usually depending on your needs it cloud be more or less. After figuring out your saving number and the reason you are saving, brainstorm ideas for managing your expenses. Also, look into factors that might affect your savings, for example, change in income, new mortgage, or any other reason but make sure you have a concrete idea and are on track about savings in 2022.
Close the chapter
To start fresh in 2022 it is very important that you end the year properly. Write a year-ending journal where you express yourself about the ways you would have made 2021 even better, also don't forget to make your end-of-year expenditure sheet and review it. More importantly, leave the past behind and start fresh!