If 2020 seemed to drag on forever, 2021 was a lightning strike. It’s hard to believe we’re drawing to a close on another year, but time moves regardless of whether we want it to or not.

This year was a wild one from the start for me, personally. I signed a book deal, traveled to Europe and became a digital nomad, launched a podcast, and broke seven figures in my business –– but it was also an incredibly difficult year as I navigated changes, the aftermath of a TikTok video going negative viral, and the loneliness that I know so many of us faced.

The year was definitely difficult. We’re still in a global pandemic, which has left many under huge financial strain.

When looking ahead, 2022 will probably feel like another “unprecedented year,” as we reckon with the shocks of 2020 and 2021 from the other side.

So how can we prepare financially for a year like 2022? The same way we always have –– one step at a time.

Every month I sit down with printed (yes, printed) bank statements, my goals, and a glass of wine, and have a Money Date. A Money Date is exactly what it sounds like –– a date with your personal finances. I use this “date” to evaluate my spending, look for mistakes, cut back on subscriptions, and plan out the month ahead.

I expand this into a more intense deep dive into my finances at the end of the year. Here are a few things I make sure to prepare for as we head into a new year.

Planning out Sinking Funds for Big Events

As I’m looking over my calendar for the following year, I make a note of “the big things” –– weddings, parties, travel, birthdays, holidays, etc., and plan a budget for my sinking funds.

I like to think of sinking funds as virtual piggy banks, with just enough space for a specific piece of my budget. Some people have apps to help them track these –– I like using a good old Excel spreadsheet.

I’ll choose a budget for each event, note when I’ll need the fund, and create a strategy to start putting aside the cash in small amounts. For example, if I’m planning to take a birthday trip in July and have a budget of $2,000, I’ll set aside about $340 a month for six months starting in January. By the time July rolls around, I’ll have exactly what I need to enjoy my vacation worry-free.

Sinking funds are great for all budget sizes and work exceptionally well for holiday gift-giving, as you have an entire year to plan (and you’re fresh off your last holiday budget, so you’ll know exactly how much you need).

Re-Evaluating Financial and Career Priorities

The year 2020 forever changed our offices, and 2021 only reinforced the idea that working from home, flex-time, and perks like unlimited vacation time are here to stay. Workers, more than ever, realized how much power they had and began fighting for better pay, better working conditions, and increased benefits.

Heading into the last few weeks of the year is a great time to ask tough questions about your current employment. Are you being paid what you deserve? Did your boss force you back into the office even though you performed exceptionally at home? Are you looking for a new challenge?

Take into consideration all the ways you’ve improved and taken initiative within your position –– the new skills you’ve learned and the ways you’ve grown. Is it time to ask for a raise or a title change?

We are living in a worker’s economy, meaning employers are begging for workers, which also means that we hold all the cards.

We also see the changes that Millennials and Gen-Z are bringing to this market. It’s no longer frowned upon to change companies every few years or even completely change industries. Have you been dying to leave your sales job to start producing podcasts? Do you spend your days at your publishing job dreaming of becoming a teacher? Now is the time to pursue those goals and make them happen!

As recently as 2019, I decided that I wanted to take Her First $100K full-time –– and the very next year, that’s exactly what I did. If you dream of starting a small business or building your side hustle into a full-time job, check out all of the incredible resources on entrepreneurship.

Sprucing Up Your Budget

You may have already guessed it, but the final months of the year are a great time to re-evaluate your budget. Are you consistently overspending in one area and underspending in another? Did you meet your savings goals? Did your income change, and you forgot to adjust your categories? Are there any subscriptions you have but never use?

Go through the whole picture with a broad stroke and a fine-toothed comb. Sometimes, patterns we may not notice month-to-month become extremely clear when we pull back the lens and look at our finances over a year.

All Things Investing

If you haven’t yet started investing, the best time to do so is as soon as you finish this sentence (with some notable exceptions of having high-interest debt or a depleted emergency fund). Investing for retirement is one of the best things you can do to build a healthier financial future and ensure you’re taken care of when you retire. If you haven’t yet, start looking into tax-advantaged options like Roth and traditional IRAs or see if your company offers a 401(k) match. Make a plan to hit new investing milestones. Don’t forget to roll over your 401(k) if you’ve left or are planning to leave a job!

If you’re already investing, take a deep dive into your strategy. You’re a year older –– is it time to change up how you’ve diversified? Are you consistently maxing out your IRA and 401(k)? Maybe it’s time to open a traditional brokerage account or start planning for your kid’s college. The end of the year provides an excellent opportunity to make sure you’re planning with the future in mind.

I have a few favorite sayings in personal finance –– one is “personal finance is personal.” The other is “the best day to start is today.” As we approach 2022, it’s tempting to look back on our financial journey and compare it to others or want to backslide into a shame mindset over our financial choices. The beauty of a new year reminds us that there are always opportunities to change and start again.

Have a joyful holiday season and a very happy new year!

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