Maybe you made New Year’s resolutions, and maybe you’ve already backslid. Either way, it’s never too late to get your financial goals on track. In this segment of Backstage Pass, recorded on Jan. 7, Fool contributor Rachel Warren explains the key steps investors should take this year to ensure better financial health in 2022.
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Rachel Warren: I think if the pandemic has taught us anything it is to expect the unexpected. You just never know what’s going to happen and I think it’s always good to plan as much as you can knowing that uncertain things can always happen.
But I think health insurance is a big one and our health insurance can be a very expensive and difficult issue for some people, especially in the U.S.
I know for me, I think it’s really important to be looking at coverage if you don’t have it already and maybe you recently made a job change and trying to get that all sorted out. But make sure you have the coverage you need for the lifestyle you lead.
For example, if you’re like me, you travel a lot. I live between the U.S. and Italy for a good part of the year. For me, I’ve made sure that I invested in buying quality health insurance that covers me both places.
If you’re going to be traveling even just for a short period, make sure you have travel insurance, especially right now during COVID times, you just never know. You want to be prepared. You don’t want to find yourself with some crazy out-of-pocket expenses that you might be able to otherwise avoid.
But on a different note, and I think these are some really basic financial planning items just focus on right now, but really important to name nonetheless.
I think now, more than ever, inflation is at record highs. That’s certainly been plaguing the stock market. Focus on whittling down any outstanding debt that you have, whether that be credit card debt, or student loans, whatever the case may be.
You don’t have to pay off your debt overnight, and most people aren’t in a position to do that, but consistently whittling that down while adding to your nest egg making sure you have robust savings. You don’t necessarily have to be debt-free to invest in the stock market.
I know that’s a common question, but if it’s a choice of choosing between the two, I think it is really important to continue to reduce your debt, and you can also build and start building a robust stock portfolio with even just a few hundred dollars here and there consistently invested in really great companies and adding to that over time.
I think focusing on your investments, focusing on your savings, making sure that aside from the capital you put toward your portfolio, that you also have that cash set aside for a rainy day and that you’re really working on whittling download those liabilities.
I think that, that is really important as we start off this new year. If you’re someone that maybe has trouble monitoring all your expenses and spending.
I know for me I have found making a spreadsheet to budget and track things can be super helpful and it makes it a lot easier to see areas of outlay that maybe you can cut back and what perhaps might be dragging down some of your long-term financial goals.
And it’s never too late or too early to start building your investment portfolio.
Even a little bit invested here and there can help you build a really solid foundation. Those are just the things I would say are great points to focus on for your financial goals for the new year.
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