It’s time to start planning for your financial future. This is the perfect time to review your current financial situation and ensure you have the necessary tools to manage it.
In 2022, the coronavirus pandemic presented a challenge for many people. It made planning for your financial future look impossible, and it disrupted the plans of many business owners and consumers. Although the outbreak is officially over, uncertainty still lingers. This article aims to provide a list of financial moves you can make in 2022 to improve your financial situation.
Top Smart Money Moves to Make This Year
- Make Investment Account Contributions Automatically
Make investing in your future a financial priority in 2022 by opening a low-cost brokerage account. This will allow you to make small contributions to your account every time you make a debit card payment.
The most popular choice is the Acorns Invest suite, a micro-investing account that allows you to make small monthly contributions to your account. Aside from being a great way to boost your contributions, the features of this account also provide you with additional value. It’s also available with a variety of low-cost exchange-traded funds.
Another tip is to open a bank account online and have your weekly paychecks automatically direct deposited. You can quickly build a savings account by having a portion of each check transferred into it each time. According to the experts at SoFi, “Automatic saving features help you organize your money, set savings goals, and save your change with Vaults and Roundups.”
- Start an Emergency Fund
One of the essential factors you should consider when establishing an emergency fund is the amount of money you need. Most people should have enough money to cover at least three months of expenses.
Getting an emergency fund started can be challenging since it usually takes a long time to set aside a large amount of money in cash. However, you may have received a second round of stimulus checks this year, which can help boost your emergency fund.
- Review Paycheck Withholdings
The first quarter of the new year is a good time to review your paycheck withholdings. It’s also a suitable time to make sure that you’re not overpaying taxes. If you’re planning on claiming dependents or have a more complex employment situation, you should review your withholdings to ensure they’re not overpaid. The IRS has an effective tool that can help you determine if you should be withholding more or less depending on your situation.
Before you start contributing to your pretax payroll accounts, you must evaluate the various types of accounts that you can use to boost your financial security. These include a health savings account, a pension, and a company stock ownership plan.
- Spend FSA Funds Before They Are Set to Expire
A flexible spending account, also known as a health care savings account, doesn’t automatically roll over into the following year. It can expire as early as December 31 of the year it was accrued. Some companies will allow employees to extend the fund’s expiration date.
Health care savings accounts and dependent care accounts generally expire on March 31. The funds in these accounts can be used to fund expenses incurred during the previous year.
One of the essential tasks that you should complete before your flexible spending account expires is to spend the money that it has. This will allow you to avoid making additional contributions to the account.
By taking the necessary steps now, you can build a solid financial foundation for the rest of your life. Having a steady stream of money can help you avoid unexpected expenses and keep you on track for your goals.