What is your personal finance resolution for 2022? Here’s what readers are hoping for

We wanted to know what Wall Street Journal readers are doing to prepare for the new year when it comes to money, so we asked them what their personal finance goals were and what steps they were taking to achieve them.

Here are some of their projects.

A habit, not a chore

As a 20-year-old student and personal finance advocate, in 2022 I look forward to continuing to contribute as much as possible to my Roth IRA to enjoy compounding, the eighth wonder of the world. Additionally, I will diversify my sources of passive income, emphasize the importance of planning for the worst, hoping for the best with at least 20% of my portfolio in cash, and most importantly, continuing to invest in myself outside of it. classroom to help fuel my ROI and mindset, my most valuable asset.

Since time in the markets beats the beat of the market, my goals are built around the concept of time and working together. This year I would like to work on making them part of my lifestyle, developing them as a habit, not just a chore or task. Through this, I hope to inspire my fellow students on campus to start as early as possible and not rely on the institutionalized education system without a traditional financial literacy program. Let’s break the money taboo and enjoy the wallet process in 2022. It shouldn’t be intimidating when we are in full control and have all the resources available at the click of a button these days!

—Mia Gradelski, New York

More income and stay thrifty

Finding – and succeeding in – a better-paying job, while keeping household spending at current economy levels. Continue to increase my retirement savings contributions using the dollar cost averaging method and make additional principal payments for our home loan.

—Ronald L. Bensley Jr., Renton, Washington.

Ready for a correction

My wife and I are both in our 50s, so unless there’s a surprise sale on beachfront properties, we don’t expect to dip into our nest egg for more than 10 years.

In 2022, given market multiples and the Fed’s promise to raise rates, we’re trying to stay ready for a correction without simply pulling out of stocks and heading for the financial bunker.

The challenge is that, given inflation, holding cash in traditional risk-free assets is expensive. Not only are we missing out on further market appreciation, but inflation is also eroding it, resulting in negative real returns.

So this year, for the first time, we are transferring more cash to TIPS [Treasury inflation-protected securities] to mitigate the impact of inflation.

If a correction occurs, we will lick our wounds like everyone else with our equity portfolio, but we can also shop at the discounted “sell” prices available on growth stocks by selling the TIPS to rebalance.

And if inflation continues to rise without a correction materializing, we expect our TIPS portfolio to at least keep pace.

—Tom Pontes, Boston

A ladder to retirement

I’m less than 10 years away from retirement, so I regularly rebalance my investments and move money from stocks and mutual funds into cash. For 2022, I plan to use some of this money to pay off my mortgage. As interest rates rise, I will use money from cash and money market funds to start building ladders of CDs and bonds at higher yields that will eventually fund my retirement.

—Richard Weimer, Baton Rouge, Louisiana.

No additional risk

My husband and I aim to maintain our current portfolio of stocks, bonds and real estate with a healthy cash reserve. Since we are both seniors, we have finally reached the point where we no longer need to take any additional risks with our money. After decades of investing, we are poised to enjoy our wealth and good health for as long as possible.

—Judy Brassaw, Bigfork, Montana.

A plan for actions

I’m a retired biologist, not a professional trader. My goal is to maintain or increase my net worth through equity investments. I have been interested in stocks, commodities and options for over 30 years. I have a retirement account from which I receive money every month. Half of that money goes to my brokerage account. My current portfolio consists only of large-cap stocks with a long-term uptrend. I sell shares only after a year, if necessary. I will trade companies whose trend or stability seems in question and others that have been trending upwards for at least five years. I stay diverse. I pay attention to the fundamental and technical aspects of the companies I buy.

—Richard Demmer, Newport, Tenn.

Self-insurance of our risks

My goals are to have the value of our portfolio grow faster than the annual inflation rate and to generate sufficient dividend and bonus income by selling covered call options and covered put options (which are options trading strategies) to cover our living expenses. To do this, I increased our exposure to stock market risk by selling more puts, which are bullish trades, and buying more dividend-paying stocks and ETFs. Until recently, our equity investments made up about 30% of our cash. With the increase in cash secured put option writing, our cash available for trading has fallen to approximately 40% of liquid assets. Having cash means we are taxed by inflation, but it protects us against a sharp drop in stock prices. I think a 6% inflation tax is cheap compared to a possible 20-50% drop in stock prices. In other words, we use part of our cash to self-insure our risks. We don’t want to take big losses and live with them for a long time, because we’re in the mid-70s and early 80s and have shorter investment horizons than younger investors.

—Donald EL Johnson, Jacksonville, Florida.

A three-step plan to increase savings

My primary personal finance goal is to grow my savings. Step 1: Increase my savings rate each month. Step 2: Stop making stock purchases and exits. Step 3: Identify and invest in a broader range of investment products, perhaps a high yield savings account or mutual fund.

—James Carolina Jr., Estero, Fla.

A new asset allocation

I intend to review our diversification strategy and our asset allocations. I’m now 46 and have been a disciplined investor since my first paycheck after graduating in 1998. However, now that saving for a distant retirement isn’t so “far off” it’s time to consider closer look at the possibility of reducing our exposure to US-centric equities and adjusting our mix of current investments and future contributions.

—Steve Conway, New Albany, Ohio

A future in crypto

I would like to build a powerful crypto wallet this year. I have just started investing in crypto assets and am looking forward to the big change.

—Abhishek Srivastava, Pune, India

Search abroad

1) Buy a second home abroad, probably in Italy. This idea came from my wife, who is from Taiwan. I scoured real estate online, mostly in Tuscany.

2) For 2022 we will see if it is worth adding to our crypto account. While living on Maui a few years ago, I would go with a small group for coffee every morning and a friend would often bring up the Internet of Things and cryptocurrency. At first, I thought crypto investing was pure speculation. In 2021, I opened a small crypto account to learn more and changed my mind.

3) Avoid using the bulk of our major assets for second homes or other purchases.

4) Stay healthy – I got a reminder last month.

—Bob Michaelson, Cape Coral, Florida.

Reduce debt, save money and have fun

My first three goals:

Continue to pay off my student debt. I created a debt repayment plan to make regular weekly payments and aggressively reduce my debt.

Make the maximum contribution to my Roth IRA. I plan to contribute $115 a week to my Roth, which will maximize the fund for the year and give me a good start to save for retirement.

Start saving money for a down payment on a house. I struggled to find a safe investment vehicle to store money that would give me a reasonable risk-reward ratio and has adequate liquidity. I’ve come across an ETF designed to be a low-risk vehicle to save for mortgage down payments, but I find the net expense ratio of 0.60% to be slightly high for my liking.

Bonus objective: save enough to go on vacation with my girlfriend!

—Nicholas Nelson, Bloomington, Minn.

Charity match

My financial goal for 2022 is to be more generous. I hope to match every personal splurge this year with a donation to a charity that fights world hunger.

Like most grandmothers, I splurge at Christmas on things my kids and grandkids will appreciate but don’t really need. One day, as delivery boxes piled up outside my door, a humanitarian aid catalog arrived in the mail. What a disparity between those lives and mine. The price of a pair of shoes would buy a pair of goats, providing a family with milk, meat and dignity for the future.

So I splurged again and matched my Christmas budget, happily buying chickens, rabbits, goats and a donkey. Then it occurred to me, why not do it all year round? Matching the Black Friday Instant Pot I don’t really need will buy six ducks. And I will think of them every time I use it, if I ever use it. I think knowing that an impulse purchase would cost double will make me a more attentive consumer. And maybe I’ll budget for a family vacation and pair it with a whole barnyard of critters that will help feed multiple families for a long time. PS The grandkids want to choose their own barnyard creatures next year.

—Rose Williams, Columbia, Missouri.

To subscribe to Mint Bulletins

* Enter a valid email

* Thank you for subscribing to our newsletter.


Leave a Reply

Your email address will not be published.