22 Financial Moves to Make in 2022

The start of a new year often means you have a new opportunity to improve your financial picture. Here are some important moves worth making in 2022.

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Sticking to a budget could help your finances in a number of ways. It could make it easier to spend less, save more, and make decisions that keep your bills more manageable. These days, there are plenty of useful budgeting apps you can use to track your expenses. Or, go old school and create a budget on paper or using a spreadsheet.

There are most likely expenses in your budget that aren't essentials. And that's OK -- we all need to enjoy our money once in a while. But it will help to order your leisure-based expenses by priority so you can cut back in some areas and free up money for savings.

Impulse buys can derail your savings efforts and leave you with credit card debt to contend with. A good way to avoid them is to pledge not to shop out of boredom. And also, don't store your credit card details on your phone or devices, as that will make it more difficult to complete unplanned purchases.

Your credit report is a snapshot of your borrowing history, and it tells lenders how reliable a borrower you are. It's important to check your credit report regularly for errors, because those can arise more often than you’d think and hurt your credit score. Credit reports happen to be free on a weekly basis through April 2022, so you have plenty of opportunity to check yours out.

ALSO READ: 3 Credit Report Errors That Could Be Dragging Your Score Down

Ironically, your credit report won't show you your actual credit score. To get that information, you'll either need to pay a modest fee or check your bank account or credit card accounts. Thankfully, many banks and credit card issuers make credit scores available for free.

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Presented by Motley Fool Stock Advisor
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You may owe money on a couple of different loans or credit cards. Take a look at your debt and figure out whether it's manageable, and whether you can accelerate your payoff schedule to save money on interest. Generally, you'll want to work on slashing your credit card debt first, as that's probably the most costly from an interest rate standpoint.

If you owe money across different credit cards, it pays to look into a balance transfer -- especially one with a 0% introductory APR. Not only will moving your balances onto a single card make your payments easier to track, but you also stand to save money on interest.

Personal loans can actually help you build credit if you make your payments on time every month. But still, the longer you carry one of these loans, the more interest you'll accrue, so see if there's a way to accelerate your repayment schedule. That could mean cutting back on a few nonessential expenses in your budget.

As a general rule, it's a good idea to have enough money in savings to cover three to six months of essential living expenses. If you're not there yet, aim to cut back on spending or boost your income so you can squeeze more money into your savings. The pandemic has taught us that having a safety net is very important, and since we don't know what turn the COVID-19 situation will take next, it's essential to have protection in the form of solid savings.

ALSO READ: 3 Reasons to Beef Up Your Emergency Fund

If you've struggled to save money in the past, consider setting up an automatic transfer from your checking account to your savings. That way, you'll send some money into savings every month before you get a chance to touch it. You can also automate your savings by signing up for your employer's 401(k) plan and earmarking a portion of your earnings for retirement.

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Presented by Motley Fool Stock Advisor
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Contributing steadily to a retirement plan can help you amass a nice nest egg, so aim to ramp up your savings rate this year, even if it’s just a modest uptick from 2021. And if you're able to max out your contributions, even better.

Socking money away in a health savings account (HSA) could make it easier to pay for near-term healthcare expenses. But an even better use of that account is to fund it, invest your money, and carry it into retirement. HSA eligibility hinges on being enrolled in a high-deductible health insurance plan, so it pays to see if you qualify based on your coverage.

Mortgage rates are still very competitive, and even if they climb during 2022, they should still be affordable on a historical basis. Lowering your home loan's interest rate by refinancing could help your housing costs shrink, making it easier to save money and keep up with your bills on a whole.

U.S. homeowners are sitting on a record level of home equity right now. If you've been putting off a big home repair or renovation, it pays to look into a home equity loan or home equity line of credit (HELOC) as an affordable borrowing option.

ALSO READ: The 2 Best Reasons to Take a Home Equity Loan

Taxes can be a burden regardless of what your income looks like. It pays to sit down with a tax professional and see if there are steps you can take to pay the IRS less. Incidentally, socking away more money in a traditional IRA or 401(k) could also result in a lower tax bill.

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Presented by Motley Fool Stock Advisor
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Without a will, you get no say as to what happens to your assets once you pass. While you can create your own will using a template you get online, it pays to see what a local attorney will charge you. You may find that you're looking at an affordable fee for a relatively simple will.

If you have people who depend on you financially, or who could get hurt financially if you were to pass away, then you need life insurance. If you've yet to price out a policy, get moving. The younger you are when you apply, the more affordable your premium rates are likely to be.

These days, the cost of living is way up due to inflation. And it's important to make sure you're being paid a reasonable wage in light of that. Don't hesitate to negotiate a higher salary at work. There's been a mass resignation that's hit companies hard, so right now you may have more leverage than usual.

A side hustle is a great way to boost your earnings and potentially develop skills that help you succeed at your main job. Think about your schedule and find a side gig that works within it. Many side hustles are flexible, allowing you to set your own hours or work from the comfort of home.

ALSO READ: Could Your Side Hustle Make You a Millionaire?

There are certain tax benefits you can reap by starting a business of your own. If you're interested in an income boost, it pays to look into starting a venture of your own. And if you're successful at it, it could one day replace your main job.

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Presented by Motley Fool Stock Advisor
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

If you have investments in a brokerage account, now's a good time to review your holdings. We don't know what the stock market has in store for 2022, so you'll want to make sure you're invested appropriately for your age. If you're nearing retirement, it may be time to shift toward more conservative investments, like bonds.

A diverse portfolio can help you grow wealth and protect you from market downturns. If you're mostly limited to stocks in your portfolio, you may want to consider adding real estate investments or cryptocurrency to your mix.

A few strategic moves on your part could make it possible to meet your financial goals in the new year. Take some time to improve your finances, because once you do, your outlook should follow suit.

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