Quick, easy things to do this year to improve your financial future

New York (CNN) You know very well that you could do a million things to improve your financial situation.

The problem, however, is that changing a million things means you have to change way too much about your life at heart. And who does that voluntarily, let alone sticks to it?

If you really want to improve your finances — and your long-term financial security — you have a much better chance if you just set 2-3 small, achievable goals that will allow you to see progress over 6-12 months. Checking these boxes encourages you to keep going.

“The most important thing is to keep it simple. Incremental, actionable and imperfect,” said Brent Weiss, co-founder and head of financial wellness at Facet, a financial planning firm.

“We’ll work on three things at most, because life happens,” he added. “It’s not about changing your life, it’s about changing a few things to improve your financial health.”

Paint your financial picture first

Before deciding on your two or three specific to-dos, Weiss suggests doing a quick overview of where your finances are right now: How much money are you bringing in each month? How much do you pay out? How much are you currently saving and how much are you spending? How much is your wealth worth? And what are your liabilities?

Once you’ve done that, take a closer look at your spending behavior. Break down exactly where your money is going and create a “needs” column and a “wants” column, said Rose Niang, director of financial planning at Edelman Financial Engines. For example, paying your rent or mortgage is a definite need. Buying flowers once a month is a wish.

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It’s not about depriving you of your desires. It’s designed to give you a clearer sense of what money you have available to reallocate when you decide other things are more important to you in order to improve your financial situation.

Here are some examples of easy-to-implement changes you might want to make this year based on your priorities.

Make a 1% change

If adding to your savings makes you feel calmer and happier, start small when money is otherwise tight.

Even a percentage point or two increase each year can make a noticeable difference over time — whether your goal is to increase savings for retirement, college tuition, emergencies, a down payment, or even a bucket list trip to increase. Still, it won’t take a huge bite out of your discretionary income.

“You’ll be surprised how you don’t notice,” Niang said.

If your retirement savings contribution rate in your employer’s 401(k) or 403(b) plan is very low, increase it by an additional percentage point or two – say, from 5% of your salary to 6% or 7% – gives you a triple benefit: more money saved, a larger matching contribution from your employer, and a larger deduction from your taxes that year because your pension contributions are tax-exempt.

Pay off high-interest debt

Credit card interest rates are at record highs this year.

So while a 1% to 2% increase in the money you spend paying off debt can help, investing more in it will really pay off in the short and long term, as too much of your hard-earned money becomes too much Pay off interest costs instead of your principal.

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One way to pay off your debt while minimizing your interest costs might be to find a good balance transfer card with a 0% initial interest rate that can last up to 21 months. Make sure the card has very low fees and penalties and that you can commit to cashing out your balance before the zero interest period ends.

Protect yourself against higher rates in other ways

Expect interest rates to remain as high as they are now, or even higher from here, as the Federal Reserve continues to hike interest rates to quell inflation.

If you’ve been relying on your credit card for just in case, Niang warns, “This isn’t the year for that.” Better start putting money aside now to cover your short-term expenses if you lose your job or be hit by an expensive emergency.

Niang also recommends that anyone with an adjustable-rate personal student loan should consider refinancing into a fixed-rate loan to protect against higher interest rates in the future.

And when you’re in the market to buy a home, the more you can invest in the property, the less interest you’ll have to pay over time.

Protect what matters most to you

If you have young children and want to make sure they have financial security in the event of an untimely death, you may want to consider supplementing your employer’s life insurance.

You may also want to meet with an estate planning attorney to see if a trust makes sense given your family and tax situation.

Make sure your portfolio is diversified

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Unless you’re an investment genius who knows what the future holds, it’s best not to put all your investment money in one basket.

So make sure your portfolio remains diversified across stocks and bonds, different investment styles (e.g. growth and value stocks, corporate and government bonds, etc.) and different sectors (e.g. technology, manufacturing and healthcare). Exactly how the splits should look depends on both your time horizon and risk tolerance.

But the goal is to ensure positive, long-term returns for your portfolio.

“Markets are cyclical,” Niang noted. “So you diversify in the hope that if one side is doing badly, one side will do well.”