Best 2022 Personal Finance Habits to Put in Your New Year Resolution

Yes, early planning is one of them — and this is why we write about 2022 personal finance habits now, in November 2021. 

The pandemic is not going anywhere. The economy is at its peak or at its lowest historical point — depending on who’s talking. Inflation makes the headlines. The crash is around every corner. 

How can you — already escaping to the dreams about your New Year resolution — ensure your chances to survive in this mess that we call Canada’s Economy in 2022? 

Step number 1 — calm down, no fear, and no panic. With 2022 approaching, you’ll see more and more apocalyptic predictions in the headlines. Relax and skip them — they all exist for the sole purpose of abusing the “2022” keyword in the search engines. (This one is different, we promise). 

Step number 2 — focus on what’s in your control, not on the global scale events. You can’t predict a stock market crash — but you can put your savings in a better place. 

Focus on something that your power can achieve, for that’s the key to financial stability. 

Here are the best 2022 personal finance habits — the ones that nobody but you can implement, and the ones that will ensure the survival of your wallet (and your mental health) in the upcoming uncertain times. 

Habit 1: Diversify!

Your savings should never be in one bucket. It sounds obvious, but we can repeat it year after year — simply because SOME people still keep all their life savings in one place. Whether it’s a bank account, a stock, an ETF, or a literal glass jar under your bed — your money should never gather all at once. 

The best way to diversify is to open a few accounts to put them all in. Have funds in:

  1. a savings account, something that doesn’t earn interest;
  2. a current account, where you can earn some interest;
  3. an investment account, where you can invest money and earn the difference between what you hold and what you need (read: inflation);
  4. a high-risk investment — whether it’s a small-cap stock market, a new cryptocurrency, or your neighbor Jim’s plant shop gig that “has no chances to fail if you invest”. 

Of course, just a small portion of your money should be in number four

This way — you’re covered from all sides. Maybe your neighbor Jim is a secret marketing genius, and maybe this new funny dog meme coin is going to do a 10x in a week. 

Diversification is the key to achieving long-term financial stability — in all cases, not just in 2022. 

Habit 2: Balance your emergency fund!  

In a perfect world, it should be about 3 months’ worth of your household expenses. Not less, but most importantly — not more. 

Most people save for retirement and forget about their tomorrow’s urgent needs. 

Focus on something that can be financially damaging tomorrow — or even today. Are you going to cash out your RRSP in case you’ll need to cover some weather damage to your house? Or if Jim the Neighbor will accidentally total your car?

Keep a few thousand dollars in the savings account — not so you can buy a yacht with it, but to pay your bills or save your lifestyle when needed. This personal finance habit is one of those that you’ll thank yourself for doing as soon as you use it. 

Habit 3: Keep your debt small and your credit scores high!

This is the one that might get you into trouble eventually. With two of the most popular ways to pay your bills, credit cards and home equity loans, you WILL accumulate some debt. At least, you’re likely to do it. 

And the most dangerous place, the trickiest place that debt can occupy, is your beloved credit card. 

The average Canadian owes around $25,000 in credit cards alone, according to TransUnion. 

We know for sure that there are two kinds of people with credit cards:

  1. the responsible ones who pay their monthly credit card bills in time;
  2. the ones who’ve fallen behind in their payments. 

So, if you’re one of the responsible ones, keep up the good work! 

If you’re late with your payments (just like 42% of Canadians are), start looking for ways to lower your monthly payments.

A debt consolidation loan might be a good option. Repelling debt is one of the most important personal finance habits in 2022 — don’t miss this opportunity to save yourself from financial ruin. 

Habit 4: Don’t let fear of the new things paralyze you!

Yes, we know, all crypto is a scam, Bitcoin bubble is about to pop, virtual reality in Meta is a money-laundering scheme, and NFT’s are just a quick silly trend that soon will pass and doom the enthusiast to live in poverty and misery forever. 

It all might be true, there’s no way to be sure. But somehow, a whole new generation of billionaires already emerged from early Bitcoin believers. Fake land in Meta’s Decentraland is listed for millions of dollars — and it sells. And NFTs… we won’t even start on this whole thing. It’s madness — but it makes money if you know what you’re doing. 

The key thing is simple: don’t be afraid of risks, but don’t be stupid as well. 

If you put all your savings, your kids’ education money, and your house on an ugly picture of a monkey (that we can right-click on) — you’re not brave or “open-minded”. You might need some help with your gambling addiction. 

However, if you:

  • Carefully examine the emerging fields;
  • Look for opportunities, not something that will help you to criticize them on more solid ground;
  • Put SOME of your money on something that your own gut and your research say can be profitable in the future; 

This way — you ARE open-minded, and your chances to enter the “I accidentally became a billionaire”-club can actually skyrocket. 

Habit 5: Plan early! 

We know, it feels like 2018 was just yesterday, and 2022 is just a number from some futuristic sci-fi novel. No way it’s already 2022! Where are all the flying cars? How can one even plan something if it feels so surreal? 

The thing is, you ALREADY know a lot about 2022: 

  • It will have 12 months; 
  • You’ll get 12 months worth of salary; 
  • Or you can lose your job in it and face a million other risks like it was in 2021, 2020, 2019, and all other previous and upcoming years; 
  • It will eventually end — and 2023 will come. 

That’s totally enough to start planning things early. And that’s totally enough to start thinking about your 2022 personal finance habits. 

You’re not getting any more certainty on Jan 1, 2022, than you have now — a month ahead. 

We can guarantee that no Christmas Spirit will do your financial homework for you, and no elves will rearrange your debts so that you’ll have a more clear understanding of what to do with this mess. 

To truly win in 2022 — start now, don’t wait for it to come. A little false start never killed nobody. Especially when you compete with just yourself in a time-trial race. 

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