As 2022 rapidly approaches, it’s a great time to assess your current financial situation and review your overall financial goals. Did you meet the benchmarks you set for yourself this year? If not, how much progress have you made? Are you working toward your objectives step-by-step? Are you close enough to your end-of-year goals that you can see them on the horizon?
In light of the exceptional challenges that 2021 presented, you may have encountered some difficulties that have placed your financial goals on the back burner. Don’t get discouraged!
As we approach the end of the year, now is the ideal time to reevaluate – and potentially reset – your annual financial plan. But before you look forward, it is essential to look back on your recent past.
Reflect on Your Annual Spending
Assess your finances and review your spending habits. An appraisal of your spending patterns can help you set more relevant and attainable goals for 2022. Take a look back at your monthly expenses since the beginning of 2021. Where has your money gone? How much of your spending was essential, and how much of it wasn’t? Have your spending habits prevented you from progressively paying down your debt? Use our calculator to help you itemize your expenses to figure out just how much you’re spending.
It is important to identify areas of improvement in terms of your overall expenses and your debt levels alike. This is vital if you want to close the gap on this year’s financial goals and set yourself up for financial success in 2022.
Start Planning for the New Year Now
Develop your annual financial plan for the coming year by using what you learned this year to help set – or reset – realistic goals for next year. After identifying all expenses that you can eliminate or trim down, you can make a workable budget.
Consider all the different ways you can pay down debt and save for the things you value the most. Be creative! Consider the very best ways you can use your tax return, end-of-year bonus, government stimulus checks, and other forms of "extra" cash. While you continue to devote your regular paychecks to meet your ongoing financial needs, other incoming funds can get you closer to your important long-term objectives.
Review Your Retirement Plan, Insurance & Other Investments
Whether retirement is years away or around the corner, now is the time to review where you stand with meeting those goals. A great place to start is by making sure you are taking full advantage of any matching fund plan that your employer may offer. Your retirement contributions may reduce your taxable income, so in addition to planning ahead for 2022, you should also be looking at your 2021 contributions. There may still be an opportunity to reduce the amount you pay in taxes this year.
Now is also the time to review your other investments. It’s important not to overlook your insurance needs and to review how your existing insurance policies are performing to protect you and your family.
When it comes to investing, it’s best to speak with a Financial Advisor who can point you toward investments with objectives that will help you reach your financial goals. A good financial strategy along with sound financial advice can equal a more manageable financial future in the coming year and beyond.
No matter how 2021 has impacted your finances, you’ll want to start off the new year on the best foot possible. By reevaluating and resetting goals now, you’ll be able to stay on the path to financial health and continue to progress toward your goals. If you need some guidance, speak with one of our financial advisors or find a local branch near you – we are here to help!
Lakeland Financial Services is a division of Lakeland Bank.
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