As COVID-19 continues to shift and change life and the world around us, how are you financially situated for 2022? If you have been one of the lucky ones that continued to have your job during this time you will likely have felt stress.
This hasn’t been an easy time for any of us, shifting to continually working at home, attending meetings online, not engaging with our fellow co-workers. It’s understandable how wealth management can take a back seat to other priorities. Congratulations on making it through so far.
As you’ve continued to work from home, you may have also noticed that you have excess money, more than before, as you haven’t been going out much, or traveling as you may have previously. The great thing about that is that you may be in a far better financial position than you have ever been.
That doesn’t take away the stress of the entire pandemic situation, and yet, it can be seen as a benefit.
What did you do with that additional income?
You may not have known what to do with the additional savings you have accumulated, and that’s okay. It’s normal, in fact, as most of us weren’t taught in High School how to manage our finances, and especially not how to maximize our wealth.
Some of you may have understood the value in putting additional funds into your 401K to maximize your tax benefits. That’s a great way to begin on the journey of wealth accumulation.
If you just left that money to grow slowly in your Savings or Checking accounts, then that’s great too. Now might be the time to take that money and invest it to begin to grow your wealth.
The bottom line is, that any additional savings you have, can be used to put you in a better financial situation, during the next year.
If you didn’t manage to save, that’s okay too
Perhaps you spent the money you earned on different things this past year. You might have wanted to try something new and different that fitted with the pandemic situation – like buying yourself a Peloton, for example.
That’s an investment in your health and wellbeing and can never be underestimated.
The whole point is, that if you needed to spend your money in order to stay half way sane during the past twelve months or more, then I think you have done the right thing.
As we move into 2022, hoping that this pandemic is going to ease and we will move into a more stable and ‘normal’ life environment again, consider what you would want as your end outcome, financially, this time next year:
- Would you want to have a huge next egg that you could place as a deposit on a house or apartment?
- Would you want to have set up a college fund for your children that is beginning to be substantial?
- Do you want to feel that you have a strong investment portfolio that has you see where you will be financially in the longer term?
Wherever you landed heading into this new year, take a fresh look at your financial situation and set out a plan and goals for 2022. It is well worth it. Especially if you realize that all it takes is getting into a systematic savings habit, and understanding how to maximize your savings with solid investments to have the life you want long term.
Jamie Lima is a Certified Financial Planner based in San Diego. He wants to educate individuals about what sound wealth management practices are, to provide for the life you want to live long term.
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