5 Strategies for Improving Your 2022 Finances

Improving your 2022 personal finances starts with reviewing 2021. What financial situation are you in and why? Next, evaluate your income versus expenses. Take note of any unexpected financial surprises that popped up in the past year. Once you've finished your review, determine your financial health and where you want to improve. Decide what financial goals you have for 2022.

To reduce debt payments, first analyze what you owe. Take a hard look at credit card debt and the interest rates you're paying. If you have multiple credit cards, consider switching to a low-interest credit card and consolidating all your balances. This will not only reduce your debt but increase your credit score.

If you can't consolidate, then choose one card at a time to aggressively pay off. Make payments on the others but emphasize one. Once that's paid, concentrate on another card. It might take time, but you'll reduce those expensive balances.

Use that same philosophy with other loans. If a large student loan repayment is looming over you, make a concentrated effort to pay it down quickly.

The bottom line is to chip away at your debt one piece at a time. That way, it won't seem so overwhelming. It's an important step to finding financial success.

Those daily spending habits can get out of hand. Between turning the thermostat up and going out to dinner, you can spend your paycheck quickly.

Know what you are spending your money on. Grabbing that daily latte at the coffee shop or adding extra streaming services and subscriptions add up fast. Do you need these? Take a week or two and write down every daily expense. You'll probably find you're spending your cash on unnecessary items.

Even if an item is only $15, keep in mind that if you spend $15 daily, you've blown through $105 a week.

When shopping, look for sale items to save money . There are apps available that will show you where to find the best discounts. Every dollar you save helps you reach your savings goals.

Once you've established your daily expenditures, it's time to formulate a budget. There are several ways to tackle the budgeting process by looking at your monthly bills. One is the 50/30/20 rule. This is when you apply:

• 50 percent of net income to essentials (car payment, utilities, rent, etc.)
• 20 percent to savings (retirement savings, education savings, emergency funds, savings account etc.)
• 30 percent to everything else (dinners out, clothing, entertainment, etc.)

Try to set up an emergency fund for those unexpected expenses. A few dollars saved monthly will go a long way. Some apps will let you plug in your numbers and track where you are with your monthly budget. At the end of the month evaluate where you stand with your money management.

A monthly budget lets you evaluate both your short term and long-term goals.

Although you'll probably want to keep your day job, having a side hustle can be an excellent strategy to increase your income. A home-based business that you can do in the evenings or weekends is great for adding to the coffers.

Start with what you like. If you have a hobby, can it be monetized? Platforms like Etsy, eBay and more are available to sell your wares. Writing is also a way to generate income. Blogging has become lucrative for some people.

Having a passive income is trending upward. That's where you set the ball in motion and then sit back and reap the financial benefits. For example, creating an educational course or making t-shirts and selling them online can turn into an alternative income stream.

Healthcare costs can add up fast. From high premiums to expensive prescriptions, a sudden or chronic illness can take a bite out of a budget.

If you're taking prescription drugs, talk to your doctor about generic ones. Discounts for prescriptions are also available. Try some of the prescription discount apps like GoodRx. Several good ones are available, and even if you have insurance, the apps may save additional dollars.

Examine your current premium. Compare what you're currently paying to other health insurance companies. If you can't switch insurance carriers because of a job or other factors, double-check the plans offered by your carrier. Some plans might have a lower premium. But to have this lower premium, you'll probably pay a higher deductible. So, decide if it's worth it.

Be aware that open enrollment for health insurance is only once a year or for special reasons. You'll only be able to make health insurance plan changes at that time.