With the New Year now officially underway, many people will be looking at how they manage their money with a fresh set of eyes.
To help, I have compiled a list of 41 Best Ways to Grow and Protect your Money in 2022.
1. Spend Less than you Earn
Without spending less money than you make, you will never have enough left over to save, pay down debt or invest. This is the golden rule – live by it.
2. Start Saving ASAP
The sooner you start saving, the wealthier you’ll be. If a 20-year-old invested £400 a month into the stock market and achieved a 7% return, he’d have £1,056,049.92 at 60 years old.
3. Track your Spending
Bring awareness to the flow of money in and out of your life by keeping track of everything you spend. Use pen and paper or a budgeting app like Money Dashboard.
4. Create a Budget
Once you know how much you currently spend, Create a Budget that you can stick to, but that will also force you to save.
5. Save an Emergency Fund
The brown stuff will one day hit the fan. Save 3-6 months of living expenses as an Emergency Fund in instant access savings accounts to deal with it.
6. Make a Financial Calendar
Mark on your calendar all-important bill dates (including quarterly and annual bills), and financial goals to keep you accountable.
7. Calculate your Savings Rate
Continually seek to improve your savings rate. The higher your savings rate, the faster you’ll reach financial independence.
Savings Rate = Monthly Savings ÷ Monthly Net Income
8. Gamify Saving
Make saving fun by playing saving games. Try a no-spend month (except essentials), save £5 a day challenge, or try not using the car at weekends. Use the PLUM to start saving on autopilot.
9. Create a Want List
Don’t buy anything on impulse. Write it on your want list, wait 30 days, and if you still want it, look for the best possible deal.
10. Clear all Bad Debt
Bad debt, such as credit cards and car loans, leave you poorer every month. Clear debt by using the debt snowball method (pay off the lowest amount first) or the debt avalanche method (pay off the highest interest loan first).
11. Exercise your Frugality Muscle
Try living more frugally (walk or cycle to work, cut your own hair, cook all meals at home).
You can always go back to your old ways if you dislike it and at least you’ll have saved some mullah.
12. Cut Non- Essential Spending
Bag some quick saving wins by cutting unnecessary spending: cancel hardly-used subscriptions, bring your lunch to work, and stop eating out as much.
13. Tackle “The Big Three”
Being able to save 50% or more of your take-home pay is often the result of “hacking” these expenses (suggestions below)
14. Reduce Housing Costs
Get a flatmate, move into a shared flat, move to a smaller house nearer work, rent out or Airbnb a spare room.
The Rent a Room Scheme lets you earn up to £7,500 per year tax-free from letting out accommodation in your home
15. Trim Travel Costs
Buy a more fuel-efficient vehicle, car share, take the bus, or sell the car and buy a bike.
16. Slash Your Grocery Bills
Make all your meals at home, bring your lunch to work, change diets or cut out alcohol. Switch to discount supermarket ALDI and save £00’s a year.
17. Plan your Meals
Plan what you’re going to eat for a week and shop with a list. This tip could easily save you 30% or more on your groceries.
18. Switch Energy Suppliers Annually
The cheapest rates are usually reserved for new customers.
Get a Quote from EDF “USwitch Best Value for Supplier of the Year 2021″.
Then earn extra money by referring friends and making £50 every time they sign up.
19. Negotiate your Bills
Haggling with (or switching) the supplier of your broadband, TV package or mobile phone could save you money every month.
20. Know your Credit Rating
21. Use Credit Cards Wisely
Credit cards build your credit rating and also provide cashback, vouchers, Airmiles and other rewards. Using them wisely is free money! But make sure you set up a direct debit to pay off the full balance every month.
22. Try to Increase your Salary
Is it possible to earn more doing what you currently do? Can you seek a promotion, work more hours, or switch companies? I once got a £10k salary increase by simply asking. It never hurts to ask.
23. Get your Side Hustle on
What skills do you have (or could quickly learn) that could be used to start a business alongside your job?
Side hustles allow you to save more and could even lead to quitting a job you hate to do something you love.
24. Visualise your Dream Lifestyle
What does financial success look like to you? How much money would you need to live the lifestyle you want?
Calculate the cost of all the one-time purchases and income you would need to live the life of your dreams.
Now get to work on that number by…
25. Set Goals and Celebrate the Wins
Achieving financial independence takes years. Keep motivated along the journey by setting mini-goals and rewarding yourself when you reach them.
26. Use Affirmations
Okay, this one’s a bit woo-woo, but it works. Come up with a money mantra to keep focused on wealth and attracting it into your life. Feel free to use mine.
“I am a money magnet. Money flows into my life in abundance, and I multiply it with ease.“
27. Get an Accountability Partner
Having an accountability buddy works for all goals, so why wouldn’t it work for money?
My Girlfriend is my main “money buddy”, but I also talk about my goals and progress with my business partner.
28. Learn to Invest
Learn about the different types of assets and their risk and reward.
Check out the Invest Money section of the site.
Claim a FREE SHARE to get started.
29. Find out your Risk Profile
High returns usually carry higher risk. Complete a FREE Online Risk Questionnaire to determine your appetite for high-risk investments then…
30. Decide on Asset Allocation
Building a portfolio that matches your risk tolerance will allow you to keep your nerve during market crashes.
31. Have a Written Investment Plan
A plan detailing your investing goals, strategy and rules will stop you from making emotion-based decisions (which often tend to be poor).
32. Contribute to your Pension
Set up a personal pension if you’re not automatically enrolled in your company pension. Pensions are one of the best investments you can make to grow your money as you are eligible for tax relief on every contribution you make. Check out my article Pensions Explained for Dummies.
33. Use your ISA Allowance
Invest in your ISA before you invest elsewhere. You don’t pay tax on any income or capital gains on investments held in your ISA.
You can contribute up to £20k into an ISA each tax year. Open a Stocks and Shares ISA with INTERACTIVE INVESTOR.
34. Get on the Property Ladder
Do the math to see whether owning or renting is cheaper in your area. If renting’s cheaper, own property through investing in buy-to-let or property funds listed on the share market.
35. Build Multiple Sources of Income
Having all your income come from a job is risky. Diversify your income sources by buying investments and building side hustles.
36. Track Passive Income and Net Worth
What you pay attention to grows. If you want to build wealth, track net worth. If you want to create more freedom in your life, track passive income.
37. Insure against Disaster
Ensure against all losses that you can’t afford to pay. At a minimum, you should insure your house, all of its contents, and your car.
Compare Insurance Quotes at Mustard.co.uk
38. Buy Life Insurance
It’s grim to think about, but make sure that the people that depend on you are financially supported in the event of your death.
39. Make a Will
Make sure your loved ones the right people receive your assets when you pass away. Make a Will Online
40. Protect your Income
Your ability to make money is your most valuable financial asset. Income protection insurance will replace part of your income if you can no longer work due to illness or injury.
41. Get Critical Illness Cover
If you develop cancer or have a stroke or heart attack, you might not be able to work, but you’ll still have bills to pay.
Critical illness insurance stops your family from being burdened with financial obligations if you become seriously ill.
So there you have it, 41 tips to grow and protect your money in 2022. If you put these into practice you will become financially successful.
It won’t happen overnight but it takes time, dedication and persistence to build wealth and passive income.
And without adequate protection, your entire world can come crashing down if life throws you a curveball, so this should be neglected either.
Hopefully, you found this valuable, let me know in the comments below.