2022 is here, so it’s time to sit down, put the kettle on, and think about the year ahead for your money.

While it might seem a bit hackneyed setting New Year’s resolutions and such, thinking about how you want your financial situation to develop will give you a good head start in achieving both short-term and long-term goals.

But what should that thought process look like?

It can be easy to get bogged down in the minutiae of financial decisions, but this should be primarily a big picture process.

Is this the year you buy a house or move up the ladder? Is it time for retirement? Or are you just looking to continue growing your wealth as much as possible?

There’s no doubt you’ll have an idea already, and life can also get in the way, but a solid direction of travel is key.

Once you’ve got that ‘big picture’ in mind, then you can set yourself targets, goals and outcomes you’d like.

Reaffirm your goals

When it comes to financial planning, wealth growth and management, it all ultimately comes down to what your goals are.

Without goals, you can have no direction in your planning. It is likely you have a goal, or at least an idea in mind to begin with.

Think about what it is going to take to achieve that goal. If it’s a long-term aspiration, one year ahead might just be a minor part of that bigger picture.

But ultimately even the small choices we make have profound effects. Whether it’s putting money down on a new car, or socking it away in an ISA instead, that will change your outlook and strategy.

Be it a new car, retirement or a house, or any other financial goal, being clear what it is, is massively important.

Having this in mind will help define important aspects of wealth building such as timeline, risk appetite, and structure of your wealth.

Review your costs

Once you’ve got a clear idea of what you want from your personal finances and wealth in the next year, it’s time to look at how you can eke more out of what you’ve already got in front of you.

It is true that every year prices go up – but in 2022 we’re under particularly significant price pressures from inflation, and now the added issue of rising interest rates too.

Reviewing your spending in light of these problems is a tried and tested method for inoculating your money against shocks.

Reviewing bills, bargaining new deals, cancelling unused subscriptions, finding ways to be more frugal with everyday and non-essential spending – these are just some of the things you can do.

Think of it as a Spring cleaning for your finances – you make decisions every day of the year that accumulate and end up changing the face of your budget over a year.

Taking time to review and reset that is essential.

Reallocate resources

Once you’ve thought carefully about your costs, where cuts can be made or money spent more efficiently, you’re ready to look at how to reallocate what you have left each month.

This also counts for what you’re already saving. Is it going into the right place?

Cash is a viable place to keep wealth, but only if you plan on using it on a short time horizon. Everything else should be invested in one way or another.

But investing is an ever-changing beast to tackle. You should have long time horizons in mind when investing, but making adjustments and reassessing investment cases regularly is important, even if you don’t make any changes.

And where it goes matters too. Pensions may be a good long-term vehicle but having an ISA, or even a LISA can be really effective for wealth growth too. Thinking about the best way to allocate to those different accounts can make a big long-term difference to your wealth growth.

Get a check up

Once you’ve got a clearer idea of your costs, and your resources that you’re ready to deploy through savings or investments, consider getting a financial health check with an adviser.

Independent financial advisers have the benefit of being able to take an overarching view of where your wealth is, and what needs to be done to maximise its potential.

Get in touch with your financial adviser and talk about the above discussed topics, and you’ll be well-set for the year ahead.