Money resolutions for 2022
Entering 2022, consumers are facing sustained high rates of inflation, possible changes to the tax code and a struggling supply chain. Amid these challenges, and taking into account the last two years of crisis, it may be more important than ever that individuals and families have their financial lives in order. These 50 items serve as a checklist: Take a moment to really reflect on where you are financially in each of these critical areas and follow these guidelines if there’s room for improvement.
Get your overspending under control.
Whether your financial goals are to enjoy a happy retirement or buy a first home, sticking to a budget is the key to success. Overspending can be caused by the influence of advertisements or an effort to keep up with neighbors, and according to Elizabeth Dunn, professor at the University of British Columbia and chief science officer at Happy Money, addressing your tendency to overspend should be your first step in creating a financial strategy. “People often have a lot of stress and baggage around money,” she told U.S. News. “Before we start talking about interest rates, let’s deal with all of the feelings and stress and issues that might be swirling around.”
Create a budget for the new year.
It’s impossible to anticipate every expense that could arise in 2022, but a big-picture budget can help you prepare for costs that come up every year. Budget for that car repair or home repair you know is on the horizon, prepare for birthdays and holidays, and consider how your income might change throughout the year.
Download a budgeting app.
To budget for the long term, you need a system. Whether it’s a spreadsheet or a budgeting app , put a plan into place to maintain your budget throughout the year. Quicken and Mint both offer budgeting apps to manage bills, credit cards and saving.
Create a will.
If you haven’t already, creating a will is one important element of your estate plan that will ensure you and your finances are taken care of if anything should happen. A will can be particularly important for individuals with young dependents, as a will often serves as a formal way of naming your child’s legal guardian.
Protect your savings from inflation.
High rates of inflation continue to drive up the cost of essentials like gas and food, but could also be eating away at your savings. Learn more about what inflation is, how it starts and how the government attempts to control it, and what you can do to combat inflation. Options might include adjusting your investment portfolio or asking for a raise to keep up with rising costs.
Prepare for rising interest rates.
As this high inflationary environment continues, it’s likely the U.S. Federal Reserve will soon raise interest rates. Rising interest rates can affect families and individuals in different ways. Rising rates can, for example, result in higher mortgage payments for borrowers with a variable rate mortgage or push banks to offer better returns on savings accounts.
Consider starting a business.
Is it time for you strike out your own? Owning your own business can offer flexibility and freedom a typical job cannot, and 2022 may be your year to finally take the plunge. To execute your business plan well, take advantage of advice from business owners who have found success themselves: Lean on your community and partners, be mission-driven and be willing to adjust as things change.
Prepare for your next major life event.
Life events like marriage and parenthood come with major financial consequences. Couples planning a wedding shouldn’t just weigh the cost of venues but may also want to consider drafting a prenuptial agreement to protect their assets. Costs surrounding having a child include child care and saving for college, and new parents should begin to budget for parenthood by reviewing their options for paid family leave , speaking with a tax professional and getting their estate documents in order.
Get on track with your retirement savings. Small increases in savings can lead to significant results when the magic of compound interest has time to do its thing. Consider bumping up your retirement savings rate 1% this year and compare your savings rate to benchmarks for your age range . If you’re not quite hitting your retirement savings goal yet, save what you can and consider ways to adjust your spending to accommodate a higher savings rate. Get ready for tax season. Discover how […]
Money resolutions for 2022