Whether you’re looking to up your income or simply want to review where your money goes each month, it’s important to regularly evaluate the amount you make and how you spend it.
While examining your personal income isn’t always easy, it can be rewarding by helping you plan your future and make sure you’re on track to achieve your goals.
In order to figure out where your money should go this year, here is How to Review Your Personal Income for the Upcoming Year and get started on getting more of it in 2022 and beyond.
How to Review Your Personal Income for the Upcoming Year
Know What You Spend
It’s important to know what you spend your money on in a given year.
This information can be used not only as a benchmark to see how your spending habits have changed over time, but also can allow you to make decisions about whether or not certain expenses are worth keeping.
Here are some of the things you might want to take into account when reviewing your personal income:
Where does most of my money go?
What did I like and dislike this past year?
What would I like to do more next year?
What would I like to do less next year?
What could I replace with something cheaper?
Am I missing anything that could help me save money?
What is my budget looking like for the upcoming year?
Know Your Sources of Income
Knowing your sources of income can be helpful in planning ahead and understanding where your money is coming from.
When looking at your personal income, it’s important to make a distinction between passive and active sources.
Passive sources are things like dividends or rent, which generate a steady stream of revenue without requiring much additional effort on your part.
Active sources are things like jobs or businesses, which require more effort but offer potential for higher earnings.
For example, if you own a small business that does well over time, you’ll receive consistent cash flow even when you’re not working;
However, if the business doesn’t do well one year and requires extra work to maintain the same level of success as other years then this would count as an active source.
If you find that your active sources have grow significantly in recent years, then this could also be a sign of financial trouble on the horizon.
One way to get a handle on your financial situation is to set up budgets for both expenses and projected future income.
These budgets will help show where you might need to cut back in order to improve your finances so that they become sustainable
Re-evaluate your budget. Look at what you’re spending, and see if there are ways that you can reduce costs or make more money.
Remember that frugality isn’t just about saving money; it’s about being deliberate in how you spend and invest your resources.
If you aren’t happy with your salary, start looking for a new job now rather than waiting until the end of the year when there may be fewer available positions available.
You could also offer to take on an additional responsibility at work, even if you don’t get paid more as a result.
You will have the satisfaction of knowing that you’ve tried everything possible to improve your situation before quitting.
As part of this process, ask yourself:
What salary am I expecting?
If after answering these questions, you still think the best move is to find a different employer, put together a resume that highlights your skills and accomplishments so far.
Send it out to prospective employers right away so they have time to consider interviewing you this fall.
Make sure to tailor the resume specifically to the position you want by highlighting relevant qualifications and experience.
Don’t forget to attach your cover letter!
First, make a list of what you want to accomplish in the next year.
It’s important that this list includes both long-term and short-term goals.
It might be hard at first, but take a few minutes and brainstorm as many goals as you can think of.
Next, set monthly checkpoint or touchstone goals so you know how much progress you’re making towards your larger goal.
For example, if one of your goals is review savings once per week.
If you don’t have any ideas yet on what your larger goal should be, ask yourself What do I really want?.
The answer may surprise you! Write down your answer. so you can identify every possible thing that could prevent you from reaching your goal.
If another person is an employer or boss, then write out ways to work better with them.
By taking care of these relationships before they need it, there will be less frustration and negative energy when times get tough.
To stay motivated, consider setting up rewards for achieving your smaller goals. Rewarding yourself each time you complete something on the checklist is a great way to keep going even when things seem impossible.
And don’t forget to check off each completed task! Once all of your tasks are crossed off, reward yourself by watching TV show or eating dinner at a fancy restaurant–whatever makes you happy.