What a year! I don’t know about you, but it feels like 2020 and 2021 merged into one loooong year. Anyone else feeling like we all need a month long vacation in a beach hut or a peaceful forest cabin? What would that Federal legislation be called? Relax America? Vacations to Support Mental Health? (Insert sarcasm here… although I fully support everyone taking a vacation in 2022… go, start checking out dream lodging on Airbnb!).
Despite the exhaustion many of us have experienced, and are experiencing from the last two years, let’s talk about ways to tee up 2022 for a less tiring year. At least financially speaking. Pull on your “Adulting” hat, grab your fav beverage and note taking paraphernalia. Deep breath, and…
Here we go! Now is a great time to review your spending habits. Wait, what did you just mutter under your breath? You’d rather binge watch holiday movies on The Hallmark Channel? Nope, we’re gonna do this and get you ready BEFORE New Year’s Eve for your mandatory financial health resolution. (You can toast your awesomeness on NYE with a glass of bubbly knowing you already thoughtfully prepared your financial goals for 2022. Go on with yo’ bad self!).
If you have an app like Mint, or a spending tool on your banking platform, brace yourself and take a peek. Be honest with yourself. Are you comfortable with your spending habits, or did your stomach twist up and you visibly cringe over the results? Regardless of which knee jerk reaction you had, take a deep breath and jot some notes down (honest ones… these are just for you, so don’t sugar coat them).
Now, take a sip of your fav beverage, and check in on your savings. Look at your balances and performance in your retirement account. Do you have an HSA or FSA? Take a peek at those if you do. Have an emergency fund? (Most people don’t, so no judgment either way). Do you have enough in that fund to live off of for a month or three? Lastly, check out your toilet paper stock… did you over buy during the Great Toilet Paper Shortage of 2020 and still have some left over? (This has nothing to do with finances, I’m just curious to see if the memes from last year were accurate, lol).
Take a sec to breathe, you’re doing great! So… did you open an investment account to invest in meme stocks or dip your toe into options trading? Or did you already have an investment account? Buy some crypto on Venmo or in your Coinbase wallet? If you answered “yes” to any of these questions, I bet you can guess what I’m going to say… yup, log in and check out your performance! Are you happy, shoulder shruggingly okay, or did your head hit the table when you dropped it in disgust? Don’t worry, I’ve got some good advice for you, just keep reading and doing. You’ve got this!
Brace yourself. It’s time to check out your debt (if you just screamed at the screen because you wanted to skip this part… I feel you, I’ve been there too). It’s like ripping off a band-aid, just do it! List out your credit card debts, your student loans, car loans, mortgage, home equity loans, all of them. Done? If you don’t feel overwhelmed right now, I’m sincerely proud of you and applaud your hard work to reduce or eliminate your debt! If you feel scared, depressed, or anxious about your debt level, that’s okay too… just don’t allow yourself to get stuck in these emotions. We’ve got work to do.
So now we have a full view of your financial puzzle. Good news is the pieces to this puzzle are interchangeable, so if you don’t like what you see, we can change that. How? Well, not through get rich quick schemes, multi level marketing, or finding that pot of gold at the end of the rainbow. It’s going to take time, dedication, and some good ol’ fashioned honesty. There’s no fast fix to finances.
Love the picture you built? Go ahead and do a happy dance! Celebrate! Then sit down and keep reading.
Here’s where you write down everything you love and hate about your current financial situation. And I do mean everything. Hate your tax bill? Want an emergency fund? Student loans feel insurmountable? Want better performance in your 401(k)? Happy with your savings level? Write it down.
Then write down goals for yourself for every item. Don’t leave any out.
So now what? There are a multitude of options. First, go talk to your financial advisor and show them everything you just worked out. Don’t have a financial advisor? Hire one… like the savvy advisors at Verde Capital. Or at your local bank or credit union. Or an interactive app. Believe me, it helps to have an objective supporter in your corner when it comes to your finances (just don’t buy or sign up for any products!).
Second, post those notes in a spot where you can see them. Hold yourself accountable so you can work towards a better financial future in 2022. Are you going to meet all your goals in 2022? No, but you’ll make progress if you stick to it and remember that financial health is like physical health: both take regular hard work to maintain and improve!
Third, set rewards for yourself when you accomplish goals. Nothing extravagant, but something that makes you happy nonetheless. List those out next to your goals where you posted them on your fridge.
Fourth, schedule time to measure how you’re doing EVERY WEEK! Don’t wait for a month to check on your spending, debt, savings, or meme stock performance. Check in every week and make notes. Be honest. What can you do the following week to work towards your goal? It doesn’t need to be huge, in fact it should be a small, realistic step.
Fifth, don’t be too hard on yourself if reaching your specific financial security and wellness goals takes longer than you originally planned. That’s life my friend. Just keep working towards your goals, keep your head up, and keep moving forward.
HAPPY NEW YEAR!
From everyone at Verde Capital Management, we wish you a wonderful, safe, and bountiful 2022!