Do you review your finances regularly? Experts suggest that you should do this at least once a year if not more. When you do a review, you’ll find many ways to improve your finances that you may have missed earlier. Or your new financial situation has opened up new opportunities for you. Even if your financial circumstances haven’t changed, it’s a good idea to do an annual review.

Most people schedule a financial review at the end of the year but that’s not necessary. There’s no best time to do this. Anytime is a good time to look for ways to improve your finances.

Here are some ideas to get you started.

1. Track Your Expenses & Cut Down Unnecessary Expenditures

Almost all of us spend money on things we don’t really need. Splurging occasionally won’t make a dent in your savings. But it can become a major problem if it becomes a habit. You can soon find yourself in debt and getting out of debt can be more difficult than you think.

Tracking your expenses is a good first step in financial planning. You won’t know what to cut back on unless you identify your spending habits.  Take a good hard look at your credit card statement and bills. Chances are you’ll find preventable expenses and notice unhealthy spending habits. Unnecessary expenses may include a cable subscription that you hardly watch.  Or an outdated but recurring magazine subscription. Splurging on the latest technology is another common but unnecessary expense.

Highlight essential and nonessential expenses in your spreadsheet. Once you’ve identified where your money is going, decide which expenses you can cut down on.

2. Refinance Your Loans 

Refinancing involves exchanging your current loans for a new loan. When you refinance, the lender pays off your existing loan and replaces it with a new loan. The new loan will have a new interest rate and new terms and conditions. Lenders base your new rate on market conditions and your credit.

The best time to refinance your loans is when you can get a lower interest rate. Even a small drop in the rate can save you thousands of dollars in interest over the loan term.

Interest rates have gone down considerably over the past two years. Right now, interest rates are the lowest they’ve been in years. This makes it a good time to consider refinancing if you’ve got student loans, a mortgage, or vehicle loans. The lower interest rates will save you a lot of money in accrued interest. And if your credit score has improved, you’ll qualify for an even lower interest rate.

Start by doing your research on refinance lenders. Compare their rates, refinance requirements, and other terms. Are the interest rates lower than the rate you’re currently paying? If they are, choose the lender offering the best deal and apply for refinancing. It’s the easiest and fastest way to improve your finances in 2022.

Raptorfi.com makes this easier for you by listing the best student loan refinance lenders. You’ll also find each lenders’ interest rates and their eligibility criteria.

3. Have Disposable Income? Start Investing

If you have disposable income, you should explore investment opportunities. You don’t need thousands of dollars to start investment. Start with whatever disposable income you have, no matter how small. Small amounts invested consistently can grow to a considerable sum.

Systematic Investment Plans (SIPs) are a good place to start. It’s similar to a recurring deposit. The difference is, a SIP account is market linked so you’d be investing regularly in mutual funds. The advantage of SIPs is that you have the flexibility to invest in the amount of your choice.

If you prefer zero-risk investments, consider recurring deposits, fixed deposits, or provident funds.

Another good place to start investing is with a 401(k) or 403 (b). These workplace retirement plans offer a guaranteed return on your investment. Don’t forget to find out if your employers offers a match on your contributions.

4. Reassess Your Existing Investments

If you’ve already started investing, it’s important to review your overall investment holdings periodically. Are they growing like you hoped they would? If they’re growing too slowly, look for other faster-growing opportunities. One thing to remember is that the fastest growing investments are also the riskiest.

It’s just as important to diversify your investments. This lowers the risks and increases the potential for higher returns over the long term.

5. Review Your Debts and Rework Your Budget

Ideally, you should be making all your debt payments on time every time. When you make on-time payments, you avoid late fees and interest on outstanding amounts. That’s the single best way not to accumulate debt.

But what happens if you can’t afford to make all debt payments every month? Maybe you didn’t get the high-paying job you were hoping for. Or maybe you lost your job or you need the money for an unexpected expense.

Refinancing your loans is one solution. You can lower the monthly payments when you refinance your loans. This will make the payments more affordable and lower the risk of default.

If you don’t qualify for refinancing, the next best solution is to prioritize your debts. List your debts in order of their interest rates. Every month, make sure to pay off your highest-interest debts first. Then go down the list and pay the lower interest debts. Yes, you’ll still incur late fees and interest on the outstanding. But it will be far lower than the fees and interest on high-interest debt.

Be proactive about taking steps to improve your finances every year. It’s the little things you do today that will make a huge difference over time. In a few years, you’ll be glad you took the time to improve your finances today.