Achieve Financial Stability and Achieve Your Goals in 2022 With These 10 Expert Tips

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According to recent surveys, over 75% of Americans are worried about their financial situation, and the average amount of debt stands at a whopping $90,460. However, achieving financial freedom, stability, and independence does not have to be a distant dream!

2022 is around the corner, and there has never been a better time to focus on your finances and the goals that you wish to achieve over the next few years. With the expert tips below, you can start rethinking your lifestyle, transform your financial situation, and live a fulfilling, worry-free life.

Use the 20/30/50 Budgeting Rule To Save More

The benefits of establishing a strict budget for your whole family are endless. Aside from helping you save more, a budget can cause you to be more accountable for your income and expenses.

There are several ways to create a budget plan for your family. However, if you are unsure about where to start and what method to use, you could start by relying on the tried-and-tested 50/20/30 budgeting rule. This rule means that:

  • 50% of your income is dedicated to the essential expenses you have to deal with each month. These essentials include rent, gas, food, and other expenses such as taxes and utility bills.
  • 20% of your paycheck is destined for your savings account. This allows you to start building an emergency or safety fund that allows you to pay a deposit or cover emergency expenses without impacting your financial situation.
  • 30% of the money you eat can go toward entertainment, eating out, vacations, and small luxuries.

While this rule represents a great starting point to improve your budgeting strategy, you can customize it to your unique needs. For example, if you are happy to reduce your disposable income, you can add up to 30% or 40% of your income to your savings account.

And, of course, you can practice these changes monthly if your income varies or if there are months that require greater expenses.

Reconsider Your Lifestyle and Embrace Minimalism

The majority of people today tend to live well beyond their means. While today’s communism and fast-changing trends might influence you to spend more, there is a lot you can do to cut down expenses and keep your financial situation balanced.

Minimalism can help you return to living below your means, prefer quality over quantity, and get rid of those items that are dragging you down – mentally and financially.

Credit Cards Can Help You Build Your Credit Score – When Used Wisely!

Your credit score might seem like a small number, but it can have a significant influence on your entire life. Your credit score is what decides what kind of mortgage rates and interests you can expect, whether loan requests will be denied or approved, and even what job positions you can access.

There are many ways to build your credit score and continue to improve your financial situation – including reducing debt and keeping up with repayments. Alongside your financial and credit history, banks will also look at how you use your credit card. Some tips to use your credit card to improve your credit score include:

  • Ask for higher credit limits – but don’t use them to the maximum
  • Repay your credit card balance in full each month
  • Don’t use more than 30% of your maximum spending limit
  • Keep using your card – you could be penalized if you don’t!

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Understand the Benefits of Taking Out a Loan

Of course, you might want to avoid debt. And, because of this, you might wish to avoid taking out additional loans. However, the reality is that, sometimes, loans are not only necessary – but they also act as enablers. For example, you might consider launching a business or investing in a house. In both cases, you might be expanding your asset portfolio and taking important steps toward future financial freedom. A loan can help you get started on the path towards success!

For example, with Wise Loan instant funding solutions, you can obtain the funds you need to get started with your next project, launch a small company, secure a home, or even pay off some debt that you are no longer able to manage.

Find a Side Hustle

Of course, you should rely on your job as your main source of income. However, what happened when the pandemic hit might have given all of us the urge to diversify our income streams. That is why millions of people resigned, changed jobs, started investing in cryptos, and took on side hustles.

Thanks to the sharing economy, today, there are plenty of alternatives for you to invest your free time and make your day work harder for you. Whether you decide to become an Uber driver or get started on Etsy by opening your shop, there are plenty of alternatives to make money out of your skills and knowledge. And, what is even more important is that you don’t have to pick between your job and your side hustle – the flexibility that new online jobs offer means that you can make money on your own schedule!

Change Your Housing Situation

Buying a house is one of the greatest investments you will make during your life. Undoubtedly, owning a home outright means that you will have reduced monthly expenses, a safety net for your whole family, and an investment that can yield important returns.

However, a home can cause your whole financial situation to fall out of balance if you haven’t properly planned the mortgage repayments or if your household income is reduced.

At the same time, it is undeniable that house prices have skyrocketed over the past years. And, today, it has become impossible for younger couples and families to find an affordable housing solution. Luckily, downsizing is becoming a popular and convenient alternative.

The tiny house movement is becoming increasingly popular, and has many benefits:

  • Tiny house owners have almost 90% less debt than the average American
  • Most tiny house owners are mortgage-free
  • Tiny houses reduce expenses
  • The cost of maintenance, repairs, taxes and utilities associated with tiny houses is much lower than standard houses
  • Tiny homes promote a much more environmentally-friendly lifestyle

If you are looking for a new home, tiny house living might be a great alternative to consider.

Invest in Yourself

It is essential or a portion of your budget to go towards self-care and self-improvement – so, the first step is to stop feeling guilty about spending on yourself!

Once you have started to account for this in your budgeting strategy, you can start looking at what investments will offer the best returns. Some of the ones to consider include:

  • Healthcare – looking after your health and investing in regular checkups is essential to avoid future severe expenses and debilitating health issues
  • Self-care – whether it is a subscription to the closest fitness center or regular spa days, you should focus on your body and mind. Don’t forget to meditate – it’s free and can help your life as a whole!
  • Education and self-improvement – no matter whether you are an established professional or you are at the start of your career! You need to continue learning, training and improving. Thanks to online courses, today, you can do so at your own pace, after work, and from the comfort of your own home – no more excuses!

Consider a Diversified Investing Strategy

It goes without saying that, to achieve financial freedom and stability, you need to have savings and spend wisely. However, just accumulating money without a strategy might not get you far! So, instead of only depositing money in your savings account, you might consider a diversification strategy.

Yes, you can continue to add money to your savings. However, now, you will also invest some of your money each month. To lower your investment risk and multiply your returns, you should opt for a diversified investment portfolio that includes:

  • Stocks and bonds
  • Real estate
  • Precious metals such as gold
  • Cryptocurrency and other digital assets
  • Collectibles and art

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Insurance and Emergency Funds: Have a Plan B in Place

Of course, saving and investing are important aspects of achieving financial stability and freedom. However, emergencies, accidents, or the sudden death of a loved one can happen.

Yes, the emotive burden that comes with this situation is what counts. Nonetheless, if, after an illness, health issue, accident, or an unexpected death you were unprepared financially, your entire life can be defined by a single event.

Instead, by having an emergency fund in place, alongside an all-covering insurance policy, you can grieve, support your family, and deal with everything that is happening in such a difficult moment with the peace of mind that your finances won’t be affected.

Don’t Forget To Set Your Goals

One of the most important aspects of achieving your financial goals is setting your financial goals! Deciding to be richer or a more conservative spender is not enough to achieve the funds you need for a downpayment for a house or as a deposit to start your business.

Instead, for 2022, have a clear plan and achievable, defined goals to achieve throughout the years. This might be all you need to keep track of your finances, become more accountable, and reach your objectives.

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