Three Tips to Manage your Money in 2022

It’s still the beginning of the year and a great time to prepare and plan to manage your money better in 2022.  One of the reasons why people fail with their finances is poor planning.  Here is how it usually goes…

It is the first of the year and you decide that you want to manage your money better, and you are going to budget your money.  So, you make out a spending plan and before you know it, because of poor planning, you spent more at the grocery store in the first three weeks of the month than you planned in your budget.  Therefore, you get frustrated and quit all the while thinking that this budget stuff just does not work for you.     

Below are three tips to help you plan your spending and manage your money in 2022.

Develop Goals for Your Finances to Manage Money in 2022

First things first and goals point the way to first.  Everything starts somewhere and like laying bricks if the first course is straight, we know the wall will be straight.  If we start in the right way we can finish in the right way.  You must have goals for your finances.  Develop some S.M.A.R.T. goals (Specific, Measureable, Attainable/Actionable, and Realistic, with some Time frame).  If you make your goals SMART you will be more adept to achieve them.  Goals are like a mission statement in business.  They tell you what you are going to do and how consistently.  When you are in doubt, or maybe need direction as to what to do with your finances, your goals will point the way. 

So, sit down this month and think about what you want your finances to look like, and what you want to do with your money.  Then write down some SMART financial goals for 2022.

Track Your spending

One of the most important things in managing your finances is tracking where your money is going.  You have to know where and how much money you are spending to effectively manage it.  The word is effective.   You can manage your money without tracking it, that’s what most of us do, but to really manage it effectively you got to know where you are spending your money.  Managing money is about behavior and tracking your money allows you to see behavior(s) that needs to be changed.

I dare you to track your spending for a month or so.  I mean really write down and keep track of every penny that you spend and where you spend it.  Once you do this you will see places where you will be able to spend less and save more.  And you will see where you can change your behavior with money.

Plan your Spending to Manage Money in 2022

Now comes the fun part — spending your money.  Call your budget a spending plan, a plan to spend your money.  One of the three things money is good for is spending (the other two are saving and giving).  So, it’s okay to spend it, it’s yours and you worked hard for it, I just want you to plan to spend all of it. 

Next, take all the information from the month worth of tracking your spending and plan the next month based on what you spent that month.  For example, if you spent $400 at the grocery store last month, you will probably spend around $400 next month.  At least you will be a lot closer than just picking a number out of the air.  Remember, all a spending plan is, is an estimate of how you will spend your money.  The better you can make the estimate, the better the spending plan.

I wish you all a happy and prosperous 2022.  By setting goals for your finances, tracking your spending, and planning to spend your money, you can manage your money better in 2022.