Setting Better Financial Habits for 2022


Looking for some good New Year’s Resolution ideas? These financial habits can benefit anyone! Adopt these into your habits in 2022 and set yourself up for a better future.

Create a Monthly Budget

Basing your budget on your monthly income is one of the easiest and most effective ways to create a spending plan. The basic steps include tracking your monthly income and expenses. There are fixed costs like rent, mortgage payments, and insurance. Some costs are more variable each month, like groceries or gas, but proper budgeting means budgeting for these with a fixed amount. In practice, your expenses should never cost more than your monthly income. For more on budgeting, visit this educational blog on budgeting from us.

Start an Emergency Savings Fund

Another good thing to include in your monthly budget is putting money aside each month into a special emergency fund. Life is full of surprises, and preparing for the unexpected can save you a ton of trouble and worry in the future. There’s even some great emergency savings options at United Financial, including our Special Savings or Money Maker account.

Pay Off Your Credit Cards in Full

Build up your credit score in 2022. There is a myth that keeping a balance on your credit card is better than paying it off each month in full. This is false because payment history is an important factor on your credit card. Payment history includes how often you make payments, overdue delinquent payments and number of accounts. Another factor is credit utilization, which is how often/how much you’re using your credit limit. The lower your credit utilization rate = the better for your score. If you can’t pay off your entire credit balance each month, experts say try to keep under a 30% utilization rate. For example if you had a $1,000 credit limit, aim to keep a balance of $300 or less each month.

Put Aside Money for Retirement

No matter your age, you should be saving for retirement if you haven’t already started. You can take your retirement savings into your own hands with a Traditional or Roth IRA, even if you’re currently contributing to a pension or employer 401k plan. To understand the difference between your IRA options and see how you can get one started, check out our blog.

Cutting Down on Treats & Takeout

There’s a reason there are Starbucks and fast food chains all over America. The impulse to stop and get a delicious coffee and perhaps a bagel is strong. It’s easy to start overspending on food when you’re eating out often–like every lunch. Bringing food from home can mean some extra time meal prepping, but it is completely worth it on your wallet.

Make 2022 Your Year

By following these effective tips, you’ll be preparing yourself for the future in more ways than one. You’ll be better set up for unexpected emergencies, car repairs, and even retirement. By understanding where your money is going, you’ll be able to better plan for saving on big items like perhaps a new boat or summer home! All is possible when you take responsibility for your financial habits.