5 Ways Women Can Manage Their Personal Finances in 2022

5 Ways Women Can Manage Their Personal Finances in 2022

Carry this message with you into the New Year ✨

12.31.2021 - By: Anastasia Barbuzzi

Can you believe it’s already that time of year? Suddenly, day 365/365 rolls around and we’re all left wondering where the time went. Interestingly though, no matter where you’re located on this planet, time has felt like it’s passing by at hyper speed due to one common factor: Covid-19. 

For how unfortunate the current global climate might be (and we’re not just talking about global warming), it’s caused more of us to reflect on the past couple of years and how damning they’ve been. However, it’s important to remember that on a more personal note, we have the power to create an infinitely better 2022.

The question remains, where do I start? Well, how about your personal finances? 

It might not sound like the “funnest” area to be analyzing come the New Year – especially after Christmas – but as we’ve said many times before on $HMONEY Radio, there’s no better time to start improving your personal finances than now.   

In Fidelity’s 2021 Women and Investing Study, executives point out there’s a “continuous thirst and interest from young women in doing more with their money”. We couldn’t agree more with their findings and for all the Ls we took as a collective in 2021, we consider the Fidelity results a major win.

If you’re one of the young women out there looking to manage and improve your personal finances in 2022, action the five steps below come January 1. You won’t regret it.

1. Take stock of your current financial situation

Before you make any “money moves”, lay everything you have out on the table. “Taking stock” does not mean you have to spreadsheet everything you’ve done with your money over the past 12 months. It can be as simple as downloading an easy to read mobile application like Hardbacon. Their all-in-one system allows you to view transactions, plan for future goals, budget and invest. 

2. Assess your income

Once you’ve taken a look at your financial standing, it’s time to take a deeper look at exactly what you’re making. We’re a big fan of this step in the process and performing it around the New Year in particular. Assessing your income is a really good way to evaluate how valuable you believe your skills and your time are. Doing so may convince you to pursue a side hustle you feel passionate about or renegotiate your salary and validate your worth. Overall, it’s a really empowering exercise. 

3. Make a plan for your money

Again, making a plan for your money can be visualized easier with a free app like Hardbacon. When you’re better able to organize your finances, you’re better able to plan. So… let’s say you want to pay off your student loan in 2022. If you can dedicate a portion of your income to making bi-weekly or monthly pre-authorized payments, you have a better chance of bringing your debt down to $0. We’ve found success with this approach, and watching your debt total get chopped down over time is super satisfying.

4. Plan ahead for large expenses with an emergency or “sinking fund”

As I talked about in our final episode of 2021, The Biggest Lessons I Learned in 2021, My First Year as a Podcast Host, an emergency or “sinking fund” will always be used in moments when you’d never think you need it. Now that bigger family/life events are bound to happen considering the public health situation, you can never be prepared enough for the day that you’re financially responsible for someone else. In the event that you do need to cough up some extra dough for something you don’t necessarily want, you don’t have to feel bad about pulling a chunk of change from your emergency or sinking fund. Plus, it’s nice to see an “extra” lump of money in your account. 

5. Recognize and manage lifestyle inflation 

You might’ve been here before and didn’t even know it. That’s OK – as people advance in their careers and earn higher salaries, spending more is common. This phenomenon is known as “lifestyle inflation”, and even though you can pay your bills, experts say that lifestyle inflation can damage your ability to build wealth. Remember: keeping up with the Joneses is literally a thing of the past but, we can’t ignore the fact that changes in the economy have a significant impact on your finances. For example, Canadian families are set to spend nearly $1,000 more on groceries in 2022 due to rising costs.

In any case, for the things you can control, we recommend giving yourself a limit for unbudgeted spending. So, if you have any money left after you’ve subtracted your expenses from your income, you can use it for fun but only up to a certain amount. Knowing that you can do whatever you want with that “fun money” instills a sense of excitement and freedom, you just have to remain conscious of your limits. Ultimately, it’s a practice of restraint and if you can put a bit of fun money into your savings, even better!  

…How are you planning to manage your finances in 2022? Let us know in the comments! 

P.S: My posts on Hardbacon’s blog might help you plan ahead. Tap or click here and here for a gander.

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