Whether you are saving money for a house or would simply like a little more cash to play around with, there are plenty of reasons why you might be trying to boost your finances this year. While improving your financial situation is always beneficial, it will become particularly important over the coming months, given that both inflation and the cost of living are hitting an all-time high.
Photo by Alexander Mils on Unsplash
With that in mind, here are some top tips that you can use to become financially healthy in 2022!
Find a side hustle. Side hustles come in many different shapes and sizes, and many of them are often borne from the business owners’ own hobbies and interests. In short, they are a method through which you can make your hobbies profitable, as they give you the chance to make extra money in your spare time while still doing something you love. For example, if you have a passion for arts and crafts, you could sell your artwork online or at local crafts fairs.
Consider investing. Many people believe that they are not cut out for investing due to the fact that it’s a pastime of those who already have a lot of money, and not necessarily those who are trying to make it. Despite this, it’s totally possible to invest with small amounts of money. You simply need to do plenty of research ahead of time to figure out which course of action is the best for you. In some cases, this could mean consulting with traders who have a high level of experience in different markets, such as crypto currency markets, so that you can make smarter, more informed decisions when putting your money on the line.
Understand what it really means to be financially healthy. Often, improving your financial health is more about changing your relationship with money than anything else. For example, while you may initially perceive financial wellness to mean you can buy whatever you want, whenever you want – this often isn’t the case. Financial health simply means “knowing that you can pay the bills today, can deal with the unexpected, and are on track for a healthy financial future”. Gaining this understanding ought to show that you aren’t as far away from financial wellness as you initially may believe.
Start budgeting. While it can seem a little restrictive, budgeting is the most effective method of improving your financial health as it encourages you to be smarter when spending money. This means you’re ensuring that every cent is put to good use, and that you aren’t overspending unnecessarily. While there are various different budgeting methods for you to consider, one of the most popular is the 50:20:30 rule. This rule encourages you to spend 50% of your post-tax income on your needs (bills, rent/mortgage), 30% for wants (dining out, entertainment), before setting aside the remaining 20% in a savings account (or to pay off debt). When following this model, you’ll find it much easier to stay on track toward a better financial future.