21 Money Moves to Make in 2022
Let’s toast to 2022 (in a safe outside location)! Even amid a pandemic, a new year means a fresh start. Vaccines are on the way, and you’re in a great position to improve your finances.
And Money can assist.
We’ve produced a list of the 21 best financial decisions for 2022. Our approach will help you budget, save more, and improve your résumé. We sought tasks that could be completed in a few hours (or days) or less.
Begin saving money and create your budget
After a bankruptcy the most important thing you’d like to avoid is for the same thing to happen itself. To ensure that this doesn’t happen, adopt good financial habits, such as opening a savings account that can be accessed in crises in your finances and creating your own budget to track your expenses and income as well as control your spending on a daily basis. These steps can prevent your spending from becoming out of control , and decrease the likelihood of you accumulating substantial debt in the future.
“Knowing how to manage your money is an integral part of the rebuilding process,” says Tayne. “Prevention is the best medicine, and saving money, along with budgeting, creates healthy financial habits for your present and future.”
“If a lender or debt collector contacts you in the future about any of the debt included in your bankruptcy filing, it’ll be helpful to have your paperwork on hand,” advises the debt lawyer from BankruptcyHQ – California. “In addition, if a debt collector contacts you about a debt you thought was discharged in bankruptcy, you have on-hand proof.”
One of the best methods for saving money is by it’s norm. It is possible to do this by setting up recurring automatic transfers into a savings account.
“With every check or payment you receive, no matter the amount, deposit a certain percentage into a savings account of some type,” advises Sean Fox, president of Freedom Debt Relief. It is recommended to save around 10 % or so per pay period however, you must choose an amount that allows you to easily and regularly make savings deposits.
Some employers provide the option to transfer a specific portion of your pay to a specific account that is distinct from the account that the majority of your salary is being deposited into. Additionally, certain banks and credit unions will also permit you to set up regular, automated transfers from an account in a checking account to a savings account.
When creating and living according to the rules of a budget may seem daunting or even prohibitive however, a budget is actually an expense plan and tool that , when employed correctly can assist you to reach your financial goals in the future. Budgeting software can be utilized to create and keep track of your spending plan. Alternatively, you could use an Excel spreadsheet or an old piece of paper Fox says. Fox.
1. Commit to saving
If Americans ever questioned the value of saving, the coronavirus epidemic has shown its worth. A Pew Research Center research indicated that 41% of Americans had had problems paying bills or housing payments since the epidemic started. At the same time, a Clever study found that 61% of Americans plan to have no emergency funds by the end of 2022. So start saving now, even if you believe you’re already in an ideal financial situation.
Financial consultants typically advise clients to divide their take-home pay 50-30-20, with 50% going to living expenditures like rent and food, 30% to fun and entertainment, and 20% to savings. But for those just beginning to save (or even those currently on track), going from zero to 20 might be intimidating, if not unattainable. So, says Kristen Euretig, CEO of Brooklyn Plans and certified financial advisor, setting modest objectives helps.
She suggests beginning small, even if it’s just a few bucks, and building up as you grow comfortable. Start saving 5% of your monthly salary in January and raise it by 1% each month. By December, your monthly emergency fund contribution will have quadrupled. “Saving is a protracted game where the turtle always wins,” Euretig explains.
2. Make Money With Your Money
Low-interest rates make it difficult to earn much on CDs and so-called high-yield savings accounts provided online. However, there are better possibilities if you are ready to work a bit more.
High-yield checking accounts (also known as incentives checking accounts) are one option, says Ken Tumin, creator of DepositAccounts.com. Some pay up to 4%. (compared to less than 1 percent for most CDs). Of course, these accounts, usually provided by credit unions and regional banks, come with certain restrictions, such as a monthly minimum of electronic transactions and a maximum payout amount.
3. Rethink Small Caps
Stocks of so-called small-cap firms, valued at less than $2 billion, have been struck. Smaller enterprises, whose financial prospects are often related to the general health of the US economy, have suffered greatly during the epidemic. While large-cap stocks have gained 14% in three years, small-cap core stocks have only returned 8.7%.
The bright lining: When the economy starts to recover, investors tend to gravitate toward small caps, whose returns may outpace larger, more stable companies. According to LPL, in the six months after the recession, small-cap stocks outperformed large-cap stocks by almost 6%.
4. Invest with ESG Funds
Young investors are increasingly interested in ESG (environmental, social, and governance) funds. According to Morningstar, US sustainable funds had received a record $31 billion in new investment by September. Some of Wall Street’s biggest names are taking note of the concept. In its annual client letter, BlackRock stated that it was integrating sustainability into risk management and portfolio construction.
It’s lovely to assume you can simply distinguish between excellent and terrible firms as an investor. But not usually. “The sector still has some noteworthy shortcomings,” says Jennifer Coombs, an ESG investment expert at the College for Financial Planning. Among these issues is that the few bodies that assess corporations on their ESG compliance have significantly varying methodologies.
Morningstar makes ESG investing easy with tools like the ESG Screener, which enables investors to look for mutual funds with a specific sustainable investment purpose, excluding cigarette or gun manufacturers.
5. Expand Your Résumé
We spend so much time inside these days that an online learning renaissance has begun. During the first few months of lockdowns, MOOCs (massive open online courses) witnessed significant user growth. “We’ve been studying what works for years,” says Julia Lamm, a PwC workforce consultancy partner. “That offers them a unique advantage.”
Genuine feedback from real instructors has replaced pass/fail grading systems. A portion of the cost of in-person tuition is spent on fast-track certificates, specializations, and “MicroMasters” programs. Aside from programming seminars and technology “bootcamps,” other non-tech services quickly gain appeal. Now you can acquire an online certification in child development, nutrition, or pet grooming. That’s only the start.
Some abilities pay more than others. (As previously revealed by Money, mastering some computer languages may instantly double your earnings.) Even though an online public speaking lesson doesn’t guarantee a six-figure pay, it might be used as a negotiating point. “A hiring manager will perceive someone going the additional mile to learn a skill as tremendously positive,” Lamm adds.
6. 401 Max (k)
LAST AUTUMN, the IRS confirmed that the contribution restrictions for retirement accounts would stay unchanged for 2022. The maximum contributions for workers under 50 are $19,500 in their 401(k) and $6,000 in their IRAs, with a catch-up contribution of $6,500 in their workplace account and $1,000 in their private account.
Most employees don’t max out their retirement contributions, so they won’t realize the IRS omitted an inflation increase. According to Vanguard, the typical member contributed 7% of earnings in 2019. (The brokerage does not monitor regular monetary contributions.)
Many plans let you arrange your contribution to grow automatically at specific intervals, such as starting each year or earning a raise. It’s one of the simplest ways to improve your financial situation, and you won’t miss the money in your paycheck. If applicable, contribute enough to your 401(k) to obtain your company match. Vanguard advises saving between 12 and 15% of your gross earnings, including the game.
Get Money Fit
7. Netflix Credit Building
You need every point you can get to improve your credit score, so consider Experian Boost. It’s a free program that leverages on-time utility bill payments to boost your FICO score. This year, it included Netflix, Hulu, and Disney+.
One of the most critical aspects of credit ratings is a long history of paying payments on time. This has traditionally disadvantaged young people and those who prefer cash. To establish you are a good borrower, Experian Boost includes extra payments, says Rod Griffin, Experian’s senior director of consumer education and advocacy.
8. Insurer Data Sharing
We drive less now that millions of Americans work from home. Last spring, insurance firms gave clients small refunds. The good news is that technology is fast, enabling occasional drivers to save – if they are prepared to let their insurer monitor their driving.
Telematics allows you to monitor your driving using onboard equipment or a smartphone app. Your data may include not just your speed but also your driving style, including how hard you accelerate, stop, and turn. This data helps the insurer to customize your premiums.
Savings are not guaranteed. However, several insurers provide 5- to 10% reductions for testing out their telemetry systems, with recurring savings of 15% to 40% for those who drive the least safely. Of course, you must be okay with your insurance tracking your driving habits. They provide feedback on your driving, which insurers claim may help you drive safer.
9. Avoid Paying Uncle Sam
Getting a significant tax return every spring is lovely, but not wise. According to the IRS, almost three-quarters of taxpayers have asked their employers to withdraw too much from their paychecks to meet taxes. As a consequence, their annual take-home income is below average. A $2,535 average refund means a monthly loss of $211.
Your tax withholding estimate will inquire about your filing status, dependents, salary, pension, and other income. The IRS advises persons who have a substantial life change — like a pregnancy, marriage, or divorce — to get checked out. Since the coronavirus outbreak, the American Institute of CPAs advises you to evaluate your state withholding.
10. Resist First Aid Offers
Because many families are still struggling financially due to the epidemic, you may be eligible for extra need-based financial help. Six out of ten universities reported a rise in financial aid requests in 2021, and there’s no reason to believe that trend will continue in 2022. Because universities are fighting to fill seats, they may be more likely to give more significant discounts or merit-based scholarships.
Sallie Mae found that over a quarter of households have disputed financial assistance offers for the fall 2021 semester. Those who did get more significant support from their institution, including 50% more in grants or scholarships.
How much additional money you earn depends on several things, including the sort of institution you attend. A four-year average of $24,700 more assistance was awarded to consumers who made successful appeals to Admit, a college consulting website that helps users negotiate financial aid offers.
11. Avoid Fraud
Scammers had a field day in 2021. The epidemic provided a “perfect storm for fraud,” according to Association of Certified Fraud Examiners President Bruce Dorris. Taking advantage of the disarray, criminals utilized phishing emails and robocalls to steal people’s money.
Protect your money in 2022 by signing up for transaction notifications (aka account alerts.) Select the transaction monitoring option in your bank or credit card settings (it may be under “security”). As soon as you opt-in, the system should send you alerts whenever your account is debited. Some banks allow you to limit the pings to certain areas, shops, or amounts.
Your money will be protected if someone spends it without your agreement. Then you may report it, minimizing the harm.
12. Get Life Insurance Now
Getting cheap life insurance requires a medical check. But if you’re afraid of going to the doctor right now, there’s a growing trend to avoid it.
You may prequalify life insurance by giving your medical information to brokers or agents. Life insurance pre qualification has been available for years, but it is now simpler than ever to get. During the application procedure, online brokers may easily access your information. For example, Assaf Henkin, co-founder, and CEO of Sprout, says authorization (a simple checkbox) enables his organization to examine candidates’ health and other characteristics swiftly.
Streamlining is particularly helpful now that COVID-19 has boosted life insurance applications, and some businesses are behind in processing applications without exam data. While a medical exam may provide access to medical data, it may not offer the same level of coverage as a medical exam. You may constantly re-evaluate your coverage after the epidemic has passed and feel more comfortable with in-person treatments.
Use Your Assets
13. Push your landlord for a rent reduction
Since the epidemic began, rents have fallen, and vacancy rates have increased in several cities. Rents are still declining in pricey coastal cities like San Francisco, Seattle, and New York. Take NYC: According to Miller Samuel, Manhattan rental rates fell 16% year-over-year in October, while the vacancy rate hit a record high of 6.1%.
With unemployment persistently high and remote work likely to persist until vaccination is widely available, this dynamic may remain until 2022. Renters should seize this unique advantage. Landlords detest vacant flats. Therefore they should be more flexible.
You might also negotiate for a reduction in rent or free months of a gym membership. Know what comparable spaces are selling for in the area. Highlight your on-time payments and good property maintenance. Because commercial mortgages are generally linked to maintaining a particular price per unit, your landlord may be more amenable to compromises than a complete rent reduction.
Most landlords will only accept alterations at the end of your lease. For now, be honest about your financial situation and speak up as soon as possible.
Getting a mortgage to refinance at a record low
Buying a house has never been cheaper. Mortgage rates hit 14 new lows in 2021, the latest being 2.71 percent. People have already benefited from the low rates by buying new homes or refinancing existing loans. According to Black Knight, a mortgage data firm, an extra 19 million homeowners may profit from refinancing at present rates.
How much could you save? According to Black Knight, typical refinancing applicants will save $300 per month, while nearly 2.5 million homeowners would save over $500 per month.
15. Unseen Home Sale
If a worldwide epidemic has left you frightened of strangers entering your house, sell to an iBuyer. These firms will make you an offer on your property without ever seeing it. It takes a few clicks (and lives in a market they serve).
iBuyers often pay 1.3 percent less than open market value ($3,500 on a $270,000 house) and incur more fees than agents. The promise of a quick sale may not be as appealing in hot markets when properties sell in “days, not months,” according to real estate tech-consultant Mike Delprete.
16. Save Big on Your Next Car
Have enough cash to purchase a car? Keep it. With ultra-low interest rates benefiting homeowners, even wealthy automobile purchasers might consider financing their purchase in 2022 to free up cash for other purposes.
According to Edmunds and Carfax, many manufacturers offer up to 72 months of 0% APR financing on new automobiles. Even if you purchase a used car from a dealership, you will likely have to pay interest. But they’re low. Many big brands offered “pre-owned” financing rates between 0.9 and 1.49 percent in December, with others offering speeds as high as 2.49 and 2.9 percent.
In general, dealerships provide better rates than other lenders, like banks. But the most pleasing clients — those with outstanding or excellent credit — get the most excellent prices.
One hurdle: Finding and affording a car may be more complex than normal. According to Cox Automotive after a year of limited inventory, both new and used car supply is growing. But prices haven’t plummeted yet, reaching record highs of over $40,000 and over $20,000 in October 2021.
17. Get Cash Back on Groceries
*Offers valid at the time of publication.
Americans are dining more at home, and incentive credit cards have rapidly adjusted. Grocery shops and supermarkets might be among the most lucrative locations to shop in 2022 if you mix higher expenditure with increasing points.
18. Get a Great TV Without Going Broke
During quarantine, Americans spend big bucks on upgrading their TVs and entertainment systems. But a 55-inch TV with superb image quality can be had for a fraction of that price right now. Think $700-800, says Carl Prouty, resident electronics guru at Abt Electronics in Illinois. “For a casual TV viewer — someone who isn’t a cinephile, who isn’t gazing at every pixel on the screen,” he explains.
Every January, a new generation of pricey TVs is released. But in recent years, the improvements have been chiefly software: quicker CPUs for a better experience. The display has remained virtually unchanged.
According to Prouty, people pay significantly more money for a comparable watching experience. He advises focusing on aspects relevant to your house.
19. Simplify Streaming
Netflix was first. Disney+, Apple TV, HBO Max, Peacock… Every time you think you’ve seen it all, another subscription-based streaming service comes along. And having all the shows available feels nearly vital during this long time of idleness.
Streaming media specialist Dan Rayburn, the creator of Streaming Media Blog, says you need to be strategic. Set up a budget for two, three, or four services at a time and rotate them. Unlike traditional TV networks, which release new episodes in September, streaming services release material quarterly, ensuring you’ll always have something fresh to watch.
20. A Smart Power Strip Saves Money and Energy
More excellent time at home implies more utility bills. The Energy Information Administration estimates that electricity prices were up to 12% higher during the first few months of quarantine than in prior years.
Look into intelligent power plugs or smart power strips that enable you to switch off all your gadgets at once. A power strip with eight outlets and a programmed timer costs as low as $22, but more costly ones include motion sensors. The National Renewable Energy Laboratory has prepared a graphic to assist you to choose between these possibilities.
21. Get Ready to Travel Again in 2022 and Start Planning
Since Pfizer and Moderna have requested clearance to start delivering COVID-19 vaccinations in 2022, it’s now time to start thinking about enjoying a genuine holiday again.
Last summer, the average domestic flight cost only $259, a record low. Airlines offered heavily reduced tickets, simple refunds and returns, and extended mileage statuses for loyal customers to keep competitive. Experts predict that the best bargains won’t be available again until bookings recover to pre-pandemic levels. “It will benefit the customer,” argues Thrifty Traveler CEO Jared Kamrowski.