Want to get the most out of life? It's all about financial goals. I guess this is a pretty obvious statement, but is something that many people don't really appreciate until they become successful. And while there's no such thing as financial success overnight, or without hard work and dedication, the first step in becoming financially free is setting personal financial goals for 2022 and 2023. If you're looking for some direction with this and aren't sure where to start, here are some of the best financial goals for 2022 to get you going:
Pay off all accrued debt.
If you're not already on top of your debt situation, it's more important to knock out your credit card balances than it is to start saving money. The sooner you can get rid of high-interest debt, the easier it will be to get back on track with your budgeting and savings goals.
If you have any student loans, pay those off first — they often come with higher interest rates than other types of debt and sometimes have special forgiveness programs or options for income-based repayment that can make them more affordable. Then tackle other types of credit card debt (and maybe even some car loans if they're killing you). Paying off your cards will give you more flexibility in how much money you can put toward savings each month, since you won't have to worry about making minimum payments every month.
Save up enough money to buy a house.
If you're single, buy a house. If you're married with kids, buy a house. If you have no kids, buy a house. It's all about the tax breaks and the fact that homes are usually appreciating assets (although not always). If you have any debt, paying it off is the first priority, but once that's done, consider how much home you can afford based on your income and expenses. And don't forget the other perks of homeownership including building equity and having a place to call your own!
Build an emergency fund of $10,000.
By the end of 2022, you’re going to need an emergency fund.
That might come as a surprise, because most people don’t have $10,000 in savings. But it’s true: If you want to make sure that your finances are in order and that you have a safety net for when things go south, you need an emergency fund.
An emergency fund is a stash of money that you keep in a bank account or in cash form for when something goes wrong. It should be enough to cover at least six months of expenses — not just rent or mortgage payments, but all your bills, including groceries and utilities. And if possible, keep even more than six months’ worth of savings on hand — it will help cover unexpected car repairs and other costs that may crop up unexpectedly over time.
The key is to put away money every month so that you have something saved up by the time disaster strikes — whether it’s a job loss or an unexpected car repair bill caused by an accident with no insurance coverage (yep).
Create a monthly budget and stick to it.
Creating a budget is a great first step towards financial freedom. The process of creating a monthly budget can be overwhelming for many people, but it's one of the best ways to understand where your money goes and what you can do to increase your savings.
Budgeting is all about prioritizing your spending so you have enough money left over for savings and any other goals you may have. It's important to remember that budgeting doesn't mean limiting yourself or depriving yourself of things you want — it just means making sure that what you want aligns with what's important to you.
Here are some tips for creating a successful budget:
Identify your top priorities. These will vary depending on your situation and goals, but they should be things like paying off debt or saving for retirement. Once you know what those are, figure out how much they cost each month and then adjust your budget accordingly.
Set realistic goals. Don't expect too much too soon; take it slow and make small changes over time instead of trying to achieve everything at once. For example, if your goal is to save $500 per month by 2022, don't try to save $1,000 per month right away because it's unlikely that you'll be able to stick with such a stringent budget. Be fair to yourself, and to your wallet.
Start investing in real estate.
Investing in real estate can be a great way to earn money. It's one of the most popular ways for millennials to invest their money, according to Bankrate.com.
In fact, it's the No. 1 financial goal for women in 2022/2023 as stated in a recent survey by NerdWallet.com.
In addition to the benefits of investing in real estate — like the potential to build wealth and long-term returns — there are several advantages over other types of investments like stocks or bonds:
You can buy properties that have been pre-screened and analyzed by experts, which reduces your risk of making a bad investment decision.
Real estate is tangible and has physical value, unlike many other types of investments that can be difficult to understand and evaluate.
You can use your home as collateral to obtain business loans or home equity lines of credit (HELOCs) without needing any additional collateral or credit history at all!
What are your financial goals in 2022?
Ultimately, there really is no right or wrong answer to this question. Your financial goals should be created with careful consideration to your current situation and future aspirations. Don't beat yourself up if your goals are not exactly what they 'should' be. Happy saving!