In the absence of 4 months to end 2022 and with inflation through the roof, it is important that you mark yourself goals to end the year well in relation to your finances. If you want to get down to business, you can do it in just 4 steps!
1- Evaluate your finances, your current financial situation
The first thing you have to do is lay a good foundation. To do this, you need to assess your financial situation and see where you start from.
Start by analyzing your income, expenses and debts. This is very important, since to end 2022 well, you must try to make the expenses are less than your income and try to keep debts below 30% of your income.
If you want to know quickly what your financial health is, you can download the Finance app, connect your accounts and after a while you will discover your finscore. That is, the score measure the health of your accounts. If you have a grade above 650, it means that you follow good habits, but if it is below 500, you urgently need to get down to work.
Keep in mind that if you follow good practices, your finscore will be higher. So if your goal is to improve your financial health, you need to take into account the tips that we recommend and, of course, follow these steps to prepare finances successfully for the arrival of 2022.
2- Make a monthly budget
The next thing is to do a monthly budget of your essential expenses and other expenseswhich can be considered expendable but also necessary.
- mortgage or rent
- Payment of supplies
- Receipts such as IBI, home or car insurance
- At least 20% should be savings, but it all depends on what you can dedicate to this game. If it is difficult for you to separate this amount, start with the least you can each month, as if it is 30 euros. Better that than 0! We will see later.
Every month you must allocate a part of your income to each of these parts, so you must do estimates as approximate and real as possible of your expenses in order to separate the corresponding money. This is how you can lay a good foundation to successfully finish 2022.
3- Design a plan to pay off your debts
If you have no debt, congratulations! That’s great and you can go directly to step number 4. But if you have debts, stay here, because you have to try to pay them off so they don’t pose a problem in your financial health.
The debts at no time should they exceed 30% of income. It is important that you stay in that range when taking out a mortgage or consumer loan.
To finish 2022 well, you should try to pay off the debts that you can afford to pay off, such as small consumer loans. In the event that you cannot afford it, you can do it later, but it is important to stay in the balance and not exceed the 30% that we told you about. The lower this percentage, the better.
On the other hand, in the event that you have debts that you can pay off, it is important that you pay them off little by little before continuing to increase your level of debt. If you save by going up in debt, you are not really saving money.
4- Start saving
At this point, it’s time to try to save. It is recommended save 20% of income. We know that a priori it may seem like a lot and even impossible for many economics, but it is important to establish this habit.
In the event that it is impossible for you to separate so much money each month, what you can do is start by allocating small amounts to savings. I mean, as much as you can. The important is make a habit. If you can separate 50 euros a month, it is always better than zero.
Once you have the habit, you will see that not only do you not notice it, but that every time you get set aside more money for savings.
In addition, it is also important that you set goals to save. For example:
- Extra liquidity for whims or trips
- Financial buffer for at least 3-6 months
- Long-term savings for your future pension
- Other goals (for example, buying a home)
With these 4 tips you will see that it is much easier for you to prepare the finances for successfully finish this 2022 and enter 2023 with your most healthy accounts. Of course, at the beginning of the year you should try to follow these good practices, because as you follow them you will see that it becomes easier for you. And they are some tips that will also help you raise your finscore, improve your financial health.
Remember that with Finance everything is much easier. Download the app and start saving money. And if you want to know more, remember that our finance program can help you. Talk later?