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The new year offers time to set goals, especially if you have a debt hangover from the extra spending the holiday months require. While Gatorade and Advil won’t help much when it comes to this kind of hangover, crowdsourcing ideas from people you trust might.
That’s where we come in.
NerdWallet’s personal finance writers and editors share what financial goals they hope to achieve in the coming months.
Bring back the budget
Making a budget is one of the first steps to taking control of your finances, but it can feel daunting for even the most financially savvy. “Although I spend my workweek immersed in personal finance topics as an editor for NerdWallet, I have a secret: I don't have a budget,” says Kathy Hinson. “My 2022 goal is to change that.”
She plans to switch from a “pay yourself first” mindset to “every dollar has a job.” In the first approach, money for retirement, college and emergency savings is diverted from each paycheck by direct deposit, and money left over can be spent. In the latter, every dollar is allocated to an expense or savings bucket.
Managing your budget over time sometimes requires revisiting what works and what doesn’t. Writer Bev O’Shea wants to start tracking “spending leaks” ever since she noticed one of the biggest spending categories in her expense-tracking software was labeled “uncategorized.”
Tackle estate planning for peace of mind
Staying up to date with estate planning is important as your life circumstances — and assets — change. “My goal is to update my will, which I haven't touched since my kids, who are in their 20s, were little, and to set up an estate plan,” says editor Sheri Gordon. “Our assets are different and more complicated than they were when we first wrote it.”
This goal became a priority as Gordon watched her mother-in-law’s health rapidly deteriorate: “We're helping go through her financial paperwork. She did a lot of things right (and neglected to do some others) in planning for her future, so we're learning from her setup to create our own estate plan.”
Prioritize college savings
College costs are at an all-time high, and saving is on the mind of many parents. Writer Lauren Schwahn wants to focus on “making regular contributions to my child’s 529 plan.”
A 529 plan is a tax-free investment plan that takes advantage of compounding interest and harnesses the power of the stock market to grow money over time to pay for education-related costs.
“I added funds sparingly in the past, but in order to stay on track, I'm making college savings a higher priority in 2022,” Schwahn says. “I'm setting up automatic monthly contributions from my bank account as an easy solution.”
Reboot travel without breaking the bank
For a few writers, finding money in their budget to travel is a top priority. Writer Sean Pyles wants to stay on track with savings goals even as he travels more.
“During the pandemic, I got used to saving a good amount of my income, and I'm wary of giving that up,” Pyles says. He’ll focus on finding “opportunities to trim costs during my travels and leveraging credit card points for cash back and hotel stays.”
Writer and spokesperson Kim Palmer has similar aspirations but wants to bring her kids along, too. “Between the budgetary demands of having three kids and the pandemic, we haven't ventured much beyond our part of the country in the last two years, but I'd really like to think of a 2022 vacation as an investment in our future family memories,” Palmer says.
Like many parents with kids too young to be vaccinated, Palmer has “concerns about booking a trip and air travel, and especially whether or not it makes sense to buy trip insurance.”
When planning a trip with unvaccinated children, also consider things like picking a destination with fewer COVID-19 cases and favoring lower-risk activities that are outdoors and in smaller groups.
Save for retirement
Retirement, especially when it’s far in the future, can seem less important than more immediate budgeting needs. However, starting early can be a big help to your future self.
“I got a late start on retirement contributions,” says writer and spokesperson Liz Renter. To get a comprehensive plan together, she gathered documents and hired a certified financial planner. “While I'm big into DIY-ing everything, I know the value of delegating to professionals not only for their knowledge and experience, but the accountability,” Renter says.
As you save throughout your career, it might be tempting to leave 401(k) retirement savings where they are, but after multiple job changes it might be hard to keep track of your money.
"I've worked for three companies over the past 10 years and let my 401(k)s linger in their respective investment managers’ accounts after moving on from each,” says writer Tommy Tindall. His goal for 2022 is to “seek the advice of a CFP to either roll them all into my current company's account, or set up a personal IRA.”
Investing your money into a single stock, bond or mutual fund can be risky, which is why writer Hal Bundrick wants to focus on diversifying his portfolio in 2022. “I want to take some of the risk out of my investments,” he says. “It just means that in a jumpy market like we've been seeing, over time, your holdings get out of whack. Too much of this, too little of that.” Bundrick wants to rebalance his target mix of holdings to match his goals.
Perhaps one of the most common money goals is simply to save more. For writer Laura McMullen, finding ways to save despite day care costs is a top priority. “We started sending our daughter to day care at the beginning of 2021, which has been a massive expense. By the time we covered all of our expenses … and set aside money for retirement, there just wasn't much left over for savings.”
She and her husband plan to devote part of any income increases to savings.
Here are some things you can do to set yourself up for success:
Set a reasonable number of financial goals. If you set too many too soon, you might get overwhelmed. You can always add more later.
Break your goals into smaller chunks to feel your progress. If your goal is to save $1,000 in an emergency fund this year, try setting aside $19 a week rather than $83 a month.
Be persistent. Achieving long-term financial goals takes time and patience. Automating your savings or debt payments can help keep you consistent.
This article is meant to provide background information and should not be considered legal guidance.