When it comes to accomplishing your New Year’s resolutions, starting the year off on the right foot can make all the difference.
The same can be said about finance: Adopting good money habits in January can literally pay off by December.
That’s why CNBC Make It spoke with a group of certified financial planners (CFPs) to learn their top New Year’s money tips. These five pieces of advice can help you prepare for a financially successful 2022:
Any good financial plan starts with a budget, and analyzing your 2021 expenditures can help you create smart goals for the new year.
“You can look at the past year and see what you’ve done and what you’re happy with,” says Kasia Marczyk, president of West Palm Beach, Florida-based Anchor Wealth Group. “Looking at the past helps you figure out what you really want to spend going forward.”
Part of that analysis should include the spending mistakes you made. But Dennis Morton, a co-founder of Allentown, Pennsylvania-based Morton Brown Family Wealth, says it’s equally important to “give yourself credit” for what you did well.
“Look back over the last 12 months and say, ‘What did I learn?'” Morton says. “Give yourself a couple of wins here to recognize that you are capable of making positive change, and then turn around and say, ‘Now, what little steps can I take toward the bigger goals?'”
Once you’ve built your new budget for the year, consider revisiting it once per month — especially if you’re a first-time budgeter, Marczyk says. That way, you can continually make sure that everything’s staying on track and, if necessary, make adjustments in real time.
“Every month is really critical,” she says. “Because then you can see where you are [in your progress].”
Every advisor CNBC Make It spoke to agreed: If you don’t write down your goals, you’ll have a harder time accomplishing them.
That applies to short-term goals, like saving up to buy a car or house, and long-term goals like building a retirement nest egg. And it’s particularly important for couples, where communication about finances is key.
“If it’s all in one person’s head, it can be confusing when you start talking about big decisions,” Morton says. “I think putting it down on paper makes it easier to communicate when there’s more than one person involved in the financial decision making.”
Laurie Allen, a CFP at Long Beach, California-based LA Wealth Management, takes it a step further: Couples should intentionally brainstorm their financial goals together, she says.
“If you’re married, sit down with your spouse and write down what you want to accomplish,” she says. “So that you can tell your money what to do throughout the year, versus your money telling you what to do all year long.”
Often, the biggest obstacle to achieving a financial goal is simple: People don’t prioritize them properly.
“If you set up a savings account and say, ‘OK, let me see what’s left over at the end of the month, and I’ll save that,’ then you’re usually not going to get where you need to be,” Marczyk says.
Instead, when you receive your paycheck, set aside the money you want to save or invest first, and start spending once that’s done. In 2019, millionaire Grant Sabatier told CNBC Make It that the strategy helped him grow his bank account from $2 to $1 million in five years.
The same concept applies to any end-of-year raise or bonus you just received: That extra money can help supercharge your savings and investments, right out of the gate.
“It’s the perfect time to go in and save a little bit more,” says Charles Sachs, chief investment officer at Miami-based Kaufman Rossin Wealth. “Before it hits your greedy little hands, put some of it into your investments.”
Sachs tells his clients that if they make a focused effort to learn about money — even if they aren’t interested in financial topics — they can make informed financial decisions throughout the rest of their lives.
“Pretend your new favorite hobby is finance and learning about money and investing,” he says. “Find your guru. Maybe it’s some influencer on TikTok who is really good with money on saving. Maybe it’s a magazine or a book. There’s a lot of good information about the basic blocking and tackling out there.”
“Training your brain to learn about money will arguably pay more dividends than anything else you ever do,” Sachs says.
It’s easy to find excuses for why the timing isn’t right. Maybe it’s a down market, or you’re dealing with personal issues. Either way, Morton says, you should find a way to get started immediately.
“The thing that’s so frustrating sometimes to hear is when people think that there’s a right time to start,” Morton says. “It reminds me of that proverb: The best time to plant a tree was last year, and the next-best time is right now.”
His rationale: The sooner you get started, the more time your money has to grow. And when you’re planning for decades in the future, even a rough first year of saving or investing should barely be a blip on your radar.
“Once you start putting it into the context of thinking long-term, then it starts to take away some of that fear,” he says. “[A month or a year is] really just too short a term of time to be concerned about.”