These Are Americans’ Top Financial Resolutions for 2022
If you’re still in the process of coming up with New Year’s resolutions, consider adding some financial resolutions to your list. What money goals do you want to achieve this year? What healthy financial behaviors do you want to incorporate?
If you need inspiration, consider making one of these popular resolutions your own.
“The best place to start saving is by creating a budget that best fits your own personal financial needs and goals,” said Meredith Stoddard, vice president of life events planning at Fidelity Investments. “Get to the bottom of how much is coming in (income) and what’s going out, including bills, expenses, debt payments, etc., which can help inform what your budget will look like.”
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Doing this can help you see how much you can realistically save. It can also be helpful to use a budgeting rule of thumb to determine how much you should be saving.
“Fidelity generally recommends implementing the 50/15/5 guideline to budgeting, which helps prioritize your full financial portfolio including spending on essentials, contributing to your retirement fund and saving for short-term needs,” Stoddard said. “This is broken down so that 50% of your income goes toward essentials such as rent, utilities, insurance and groceries; 15% should go toward your retirement savings; and 5% is what you should aim to save towards any short-term savings goals, such as setting up an emergency or rainy day fund. The remaining 30% can be spent as you see fit — whether that’s an opportunity to treat yourself or putting more money towards a specific savings goal.”
Stoddard said that while this kind of budget can be a good general guideline, it doesn’t work for everyone. It’s important to create a budget that works for you.
“There isn’t a one-size-fits-all approach to budgeting, however,” she said. “Depending on where you live, such as a city where costs are higher or if your income is variable, you may need to be more flexible.”
To make sure you stay on track with your savings goals, be sure to continue tracking your progress throughout the year.
“Consider doing regular check-ins on your budget and making sure you’re staying on top of savings,” Stoddard said.
Pay Down Debt
Paying down debt is the second-most-popular financial resolution — 41% of Americans are resolving to do it this year. This may be especially top of mind with federal student loan repayments set to begin again later this year.
“As student loan payments will resume in [May] after a pause of almost two years, many are starting to think about how to pay down their debts in the new year,” Stoddard said. “Consider paying off debt with your income, because debt repayment affects your ability to save.”
If you have a lot of high-interest debt, consider transferring it to a lower-interest credit card or loan if possible.
“To pay back debt efficiently, shop around for low-interest balance transfer offers or loans to ensure more of your money goes towards paying down the principal,” Stoddard said.
You should also be making more than the minimum required payment whenever possible.
“Cut back on spending in other categories in order to do so, if that is practical,” Stoddard said.
Because saving more and paying down debt often require spending less, it’s no surprise this is also a popular financial resolution. The Fidelity survey found that 31% of Americans want to spend less in 2022.
“While the majority of our income goes toward the essentials category, including rent and food, there are a number of ways to reduce other essential costs,” Stoddard said. “Consider making small changes to your everyday habits — cut down the use of utilities by running the dishwasher less frequently, cook more at home rather than getting takeout, negotiate fixed costs including the terms of your lease with your landlord or get a roommate to cut down on rent, and review your monthly subscriptions that you may have forgotten about. These small adjustments can certainly add up.”
Stoddard said that you should also be mindful of impulse spending, which can derail your budget.
“It’s so tempting to impulse buy, especially with the ease and accessibility of online shopping,” she said. “To help combat this, try giving yourself a full day before purchasing that item. By having that time to wait, you might realize that you actually can live without that product, and instead put that money towards an important short- or long-term savings goal.”
How To Stick To Financial Resolutions
Whatever your financial resolutions are, they won’t be effective if you don’t actually stick to them.
“The key to success in sticking to financial resolutions is to set clear, attainable goals and stay up-to-date on your progress,” Stoddard said. “Once you get into the routine of checking in on your finances and making sure you’re moving toward the short- and long-term goals you set for yourself, it will become a positive life-long habit.”
If you’re unsure what your financial resolutions should be, seek out resources that can help you build a financial plan.
“There are a number of free resources to help you develop your plan and achieve your goals,” Stoddard said. “Consider setting up an appointment with a financial professional for additional guidance.”
A financial professional can help you create a plan based on what matters most to you, whether that’s saving for retirement, college or an emergency fund, and can help you adjust your plan as your priorities evolve.
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