It’s always a good idea to do a financial checkup at the beginning of the year, but it can be stressful, so many people put it off. Budgeting for the entire year may seem overwhelming at first, but here are some simple ways to start cleaning up your finances.
? 5 Steps To Cleaning Up Your Finances This New Year 2022
1. Update your contact information
As the first step, make sure your financial institutions and employers have your new address if you’re planning to relocate in 2022. You don’t want to miss an important piece of paperwork and mess up your 2022 taxes—so it’s worth a second look when cleaning up your finances.
2. Review the status of your subscriptions and automated payments.
Make a list of your subscriptions and figure out which ones you need and which ones you can go without. Even if you only find one or two goods that can be eliminated, you’ll still be able to save money for other uses.
Even if you’ve already terminated your subscription, it’s a good idea to double-check that your monthly payment is proper to ensure that you don’t end up paying more than you intended for. There is a chance that cable companies will not always meet their promises to lower rates, and autopay makes it easy to ignore billing mistakes.
3. Your banking passwords should be updated.
When it comes to cleaning up your finances, your banking login is the one thing you don’t want to lose.
Ideally, use a password manager to create new passwords for all of your bank accounts when you begin the new year.
Even if you don’t have one, you should get one: there are several benefits to using password managers, including the ability to easily keep track of all the accounts you use, as well as encrypting your data to prevent leaks or attacks.
At this time of year, many companies offer cheap subscriptions, so you may be able to save some money.
4. Clear any remaining amounts on payment apps.
Check to determine if you’re carrying a balance if you use Venmo, Cash App, PayPal, or another payment app. The majority of folks are—which means you’re likely to come upon some free money.
If you do, you can deposit it in a high-yield savings account, use it to pay off credit card debt, donate it to a local mutual assistance fund, or simply stash it away for a rainy day.
5. Keep an eye on your savings and debt-reduction plans.
Check in with yourself every year to see if you’ve made any progress toward your financial goals. If so, how satisfied are you with the results? If not, what plans do you have for 2022?
Remember to take into account other factors, such as interest rate changes, when calculating your savings. Look for a better deal if the interest rates on any of your accounts have risen significantly in the past year.
Related Article: The Basics of FIRE (Financial Independence and Early Retirement)
? Bottom Line
Keep in mind that reorganizing your finances does not have to be a time-consuming ordeal. The majority of these jobs may be completed in under five minutes. Start with one or two things, take care of them, and then move on. In 2022, you’ll be in a considerably better position.