Welcome to 2022!
It's crazy that another year has come and gone. Hopefully 2022 is better than 2021, but I'm not gonna hold my breath on that...
As we move into another year, it's important that you take a good look at your financial picture to make sure you are on the right path to ensure your financial well-being in the future. I'm going to discuss 4? important areas that you should check.
1. 403(b)/IRA/Roth Contributions
The New Year is a good time to look back at the total contributions you made to your retirement accounts the previous year. These retirement accounts are your best vehicles to saving for your future retirement. If you aren't maxing out your contributions to these accounts, consider increasing the amount you contribute for 2022. Some people calculate their contributions by a percent of their salary while others contribute a fixed $ amount per paycheck. Talk to your business office about upping your contributions by a percent or two. Even and extra $25/paycheck will add up to a nice dollar amount after years of compounding.
2. Analyze Your Budget
This is an often overlooked task that many people dread doing. To take control of your financial future, you MUST look back to your past. Look back at 2021 and calculate what all of your expenses were and what categories are they in. You can do this by hand, OR more realistically, you should let a software program do it for you. There are many options out there like Mint, Personal Capital, Quicken, just to name a few. This can be a painful experience for many people when they realize they spent $400/month on Amazon.com buying wants instead of necessities. (Yes, I catch myself on that site too much and it's one of my 2022 goals to cut that spending!)
3. Find places to cut costs
Once you have studied your spending from the previous year, it's time to hunt for areas to cut costs. It's common for people to look at their big expense areas and try to cut costs in those areas, but it's also just as important to look at those costs you "think" are fixed. Shop around for your home and auto insurance to see if you can save by switching to a different company. Most insurance companies just continue to raise your rates year after year the longer you are with them. Look at your cell phone bill and see if you can drop to a cheaper plan. Look at your online subscriptions and see if you really need Hulu/Netflix/Amazon Prime/Disney+/etc... My goal for 2022 is to lower our spending on groceries. I hate to admit that we waste far too much food in our household. With one child off at college, our food bill should go down (depending on how much inflation keeps rising of course!) Whatever you cut in this area, may be able to cover the increased retirement contributions.
4. Look at your job situation
Education has often been an occupation where a teacher starts their career at one school and maybe leaves after a year or two, but then settles into that district and remains their for the rest of their teaching years. This can be a great as it allows a teacher to become comfortable in that position and create structure in their lives, BUT it can also rob them of higher earnings and a greater net worth because they may stay in a low-paying district their entire career. Most of you have probably noticed that teachers are retiring or leaving the profession in the greatest numbers on record. This has created openings in every content area and in every part of the state. It SHOULD be on your radar to at least take a look at some of these openings in other districts to see if you are leaving money on the table by staying in your current district. "Job-hopping" is very common in the private sector and also one of the best ways to increase your earning potential.
In conclusion, your financial future is in your hands. These uncertain times have shown us that school districts are NOT worried about your financial interests. Don't be afraid to step back and look at YOUR picture and what is best for you and as always...
KEEP STACKIN!