6 Smart Financial Moves to Kick Off 2022 – Motley Fool

6 Smart Financial Moves to Kick Off 2022 – Motley Fool

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Be sure to tackle these as soon as you can.

Key points

  • The start of a new year is a good time to change your finances for the better.
  • Tasks like building your emergency fund, paying off holiday debt, checking your credit report, and more will help you close out 2022 in a more financially sound place.

Whether you’re excited about the prospect of a new year, the start of 2022 means you have a prime opportunity to get a handle on your finances and change your picture in a positive way. Here are six key moves to make as 2022 kicks into gear.

1. Build or boost your emergency fund

Without money in the bank, you might instantly land in debt the next time you’re faced with an unplanned expense you can’t put off. And if you were to lose your job, you could land in dire financial straits in the absence of an emergency fund.

That’s why now’s the time to assess your savings account balance. If you don’t have at least three months’ worth of essential living costs socked away in the bank, make an effort to boost your emergency fund. You can do so by cutting back on spending or getting a side hustle to boost your income.

2. Come up with a holiday debt payoff plan

It’s not uncommon to close out the holiday season with a pile of debt. If that’s the boat you’re in, the sooner you pay it off, the less it’ll cost you interest-wise.

You can pay off that debt fairly quickly by boosting your income with a second job and making budget changes to free up cash. You can also look at making that debt less expensive — namely, by doing a balance transfer if you qualify for an attractive offer.

3. Make your mortgage less expensive

Chances are, housing is your largest monthly expense. If you own a home, it pays to look into refinancing your mortgage.

Right now, refinance rates are very attractive. If you’re able to lower your home loan’s interest rate, your monthly payments could shrink, freeing up more cash for other purposes.

4. Check your credit report

Your credit report is a snapshot of your borrowing history, and it’s an important document to read, especially if you’re planning to apply for a big loan in the near term, like a mortgage. Normally, you’re entitled to a free copy of your credit report once a year from all three major reporting bureaus — Experian, TransUnion, and Equifax. But right now, credit reports are actually free on a weekly basis through April, which means you have plenty of opportunity to access yours without spending a dime.

5. Take steps to boost your credit score

The higher your credit …….

Source: https://www.fool.com/the-ascent/personal-finance/articles/6-smart-financial-moves-to-kick-off-2022/

Personal finances