Before you do, there are some smart money moves you can still make that can set you up for success in 2022 and beyond. To be sure, practicing good financial health is important all year long. However, there are some Dec. 31 deadlines looming ahead.
As 2021 heads into the history books, here are some things you can do to start 2022 on your best financial footing. Whether it’s to maximize your stock investments, minimize your taxes, get the most out of your employee health accounts or even stays on top of expiring credit card rewards now is a good time to do the following money moves before 2022.
1. Start Fresh, Set New Goals and Make a Plan
Its resolution season but those rarely last. Instead of making lofty self-promises that probably won’t come to fruition, turn over a new financial leaf for 2022 with a plan based on realistic goals.
2. Review Your Money Goals
The first place you’ll want to start is to ask yourself, “What are my money goals?” Writing your goals down can help you visualize them and set your plans in action. Whether it’s saving for a down payment on your first home or a new car, paying off credit card debt, refinancing your student loans for a lower interest rate, or to start micro-investing, putting these goals down on paper will help you get started.
3. Tune Up Your Stock Portfolio
With all that’s happened this year, this is a good time to make sure your stock investments are aligned for your goals. It’s likely that your portfolio will need to be rebalanced. It’s been a volatile few months, and you can leverage this to your advantage. You’ll also want to account for the potential for higher interest rates in the coming months. Here’s some guidance to attending to your stocks at the end of the year
4. Start Budgeting
Budgeting is key when it comes to managing your finances responsibly. Luckily, there’s a simple 50/30/20 budgeting rule you can follow in 2022 to keep your finances in order.
- 50% “needs:” your monthly rent or mortgage, groceries, gas, medical expenses.
- 30% “wants:” entertainment, dining out, traveling.
- 20% “savings and debt:” monthly contributions to your savings account, your student loan payment, or your investments.
5. Remember your Credit Card Rewards
Credit card rewards expire, and they can be a moving target. Some cards have relaxed those expiration dates because of the pandemic. The end of the year is a good time to check your rewards and ensure that you don’t let them expire before you can use them.
6. Check your Credit Score
This may seem like a given, but many people aren’t sure about their current credit score. Your credit score updates periodically and is affected when you open or close new lines of credit, when you make timely payments (this is good!) or miss payments (this isn’t so good) on a loan or a credit card, or when your credit access line increases.
7. If You Don’t have a Retirement Account, Open One Now
If you’re not saving for retirement, the single best thing you can do is open a tax-advantaged account and stuff as much money into it as legally possible before New Year’s Day. Not only will you start building a nest egg, but you very well might lower your 2021 tax bill.
8. Make Sure to Put yourself First
Making sure you’re on the right track financially can seem like a daunting task. It’s of utmost importance to take care of you in the process and not get too stressed out about money! Whether it’s exercise, meditation, or healthy eating habits, your mental and physical wellbeing come first. And yes, it’s still possible to save money while making healthy life choices.
9. Look at Medical Expenses
If you still have money left in your flexible spending account, you may want to make that doctor’s appointment you’ve been putting off or buy qualified items so that you get the reimbursement for this year.
10. Make these Moves to Lower your Tax Bill
Things you do now can have a significant impact on the amount of taxes you have to pay in April. We have a list of 10 things you can do to make sure you’ve done what you can to make that figure as low as possible.
Whether it’s to prepay bills for deductible expenses or to sell investments that have lost value, there are things you should do this time of year to make sure you’re not paying unnecessary money to Uncle.
You should also max out your tax deductible retirement savings and contributions. Check your charitable donations to make the most of their impact on your taxes, whether you itemize or not.
And if you’re thinking of investing in a mutual fund at the end of the year, make sure to check when the fund is paying its capital gain distribution. You don’t want to pay tax on gains you didn’t enjoy