RUEDI: Financial resolutions for 2022 | Business

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Millions of Americans are likely to make New Year’s financial resolutions for 2022. Despite COVID and the other challenges we have faced over the past 12 months, we are still filled with an abundance of seasonal spirit and d optimism for the coming year.

We all have our fair share of vices and room for improvement, especially when it comes to money. It’s no surprise that financial-themed resolutions are among the most popular to make in the New Year. In fact, the number one financial resolution for 2022 is to save more, with nearly a third of Americans on board.

But only 42% of decision makers plan to keep their vow for a full year, which isn’t a good sign if you’re hoping to improve your financial situation. Nor the fact that 7 in 10 people admit to cheating on a New Year’s resolution in the past.

Do not be discouraged. Here’s a list of the top New Year’s financial resolutions for 2022, along with a game plan to make them come true.

1. Make a realistic budget and stick to it: The fact that we’re on the verge of ending 2021 with over $ 950 billion in credit card debt is a little less surprising when you consider that fewer than five in 10 adults are on a budget. In short, missed payments and damage to credit score are in our future if we don’t cut back, necessitating rethinking how we allocate our money.

2. Pay your bills right after receiving your paycheck: Taking care of your monthly obligations before indulging in luxury spending is a useful budget strategy. It gives you a better idea of ​​what you can really afford and what you can’t. It also helps you avoid having late payments reported to major credit bureaus, which is one of the easiest ways to hurt your credit score.

3. Add one month’s salary to your emergency fund: Almost half of Americans don’t have funds for a rainy day. Like a person without insurance, people without emergency funds try fate, exposing themselves to financial catastrophe through unforeseen unemployment or major medical expenses. Many people have discovered it the hard way over the past few years. Building reserves should be a top priority in any financial makeover.

4. Get an A in financial literacy: The levels of financial literacy in this country are far too low and they are going in the wrong direction. In 2021, about 43% of Americans give their financial literacy a “C” or less, according to the National Foundation for Credit Counseling. In 2010, this figure was 34%.

Your goal should be to get at least an A- by 2023.

5. Make sure you have enough disaster insurance: COVID has shown how fragile and precious life is. And if other people depend on you, the pandemic should illustrate the importance of making sure these people are taken care of, even if you are not there or able to work. This includes taking steps such as purchasing life and disability insurance, in addition to making sure you have sufficient health insurance coverage. Hopefully, your family won’t need to file claims for a very long time, but you better be prepared.

6. Focus on physical health, given its strong link with financial health: There is a clear link between physical, emotional, and financial health, and this was particularly evident in 2021. For starters, the average person spends about $ 5,177 on health care each year. Money and the economy are also our biggest sources of stress, according to the American Psychological Association. And people who exercise regularly tend to have better credit scores.

7. Look for a better job: Sometimes we get so wrapped up in spending less and saving more that we forget to address the other side of the equation: how much we earn. But the benefits of finding a better paying job might actually outweigh everything else put together.

The COVID pandemic also illustrates how important it can be to find the right job opportunity remotely. Not only does working remotely save you on travel costs and risk your health, it also gives you more freedom to choose where you want to live. And moving to a place where the cost of living is low would cost you a lot more.

This is intended for informational purposes only and should not be construed as personalized investment or financial advice. Please consult with your investment and financial professional (s) regarding your unique situation.

Ruedi is a Regional Marketing Specialist with Savant Wealth Management in Bloomington.


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