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How to make 2022 financial resolutions you can actually keep

Financial experts explain how to tell a good resolution from a bad one.

It’s a new year — which means it’s time to think about new year financial resolutions.

It’s also time to reflect on our 2021 financial resolutions, whether or not we want to. Some of us may have achieved our 2021 financial goals with time to spare. Others of us — well, let’s just say that we’re considering making the exact same new year’s resolution in 2022.

Yes, 2021 was another unprecedented year — which may have made it difficult to keep some types of financial resolutions. However, it is possible to set financial goals and continue working towards them no matter what the next year brings.

“As the saying goes, if you shoot for the stars and only reach the moon, you’ve still gone an awful long way,” explains LendingTree Chief Credit Analyst Matt Schulz.

If you’re trying to figure out how to make a financial resolution you can actually keep, you’re in the right place. We asked three financial experts what type of realistic goals you should make, how to tell a good financial resolution from a bad one and what to do when life gets in the way of your financial plan.

In this article:

What makes a good financial resolution?

“A good financial resolution will be one that is well defined and broken down into easy-to-follow steps,” says Steffa Mantilla, Certified Financial Education Instructor (CFEI) and founder of Money Tamer. “If you don’t break down your financial goal into steps on how to achieve them, you’ll likely not work towards the goal or feel lost trying to complete it.”

Mantilla suggests using the SMART goal method to create financial resolutions that are specific, measurable, actionable, realistic, and time-based. If you want to save more money in 2022, for example, here’s how you’d turn that resolution into a SMART goal:

If the SMART goal method feels intimidating or overly complicated, don’t worry. Not all of our experts agree with this type of financial planning.

“I’m actually a believer in jumping in and then figuring it out in many cases,” says Schulz. “Many folks might disagree, but I think excessive planning and analysis at the beginning often prevents people from even getting started.”

Schulz suggests taking a more holistic approach to financial resolutions. If you want to save more money in 2022, you don’t need to set a monthly savings goal that you might not always achieve. All you really need to do is get into the habit of putting extra money into your savings account — whether that’s $10 or $100. “Once you’re in that habit, you can figure out what to do in the long run.”

Jim Wang, founder of WalletHacks, doesn’t like the concept of New Year’s Resolutions — including financial resolutions. “I feel making a new year’s resolution can put too much pressure and weight on the goal,” he told us.

In Wang’s experience, many people set resolutions that are either too modest or too ambitious. “You may not be willing to set an aggressive resolution for fear of failure,” Wang explains, “or you set one so aggressive that you fail quickly.”

Wang suggests asking yourself how you want your life to change in 2022 — and planning your finances accordingly. “What do you hope to accomplish this year that will make your life better? Do you want to retire sooner? Do you want to take a vacation? Let your wants and needs dictate what resolutions to set.”

“As the saying goes, if you shoot for the stars and only reach the moon, you’ve still gone an awful long way.”

—Matt Schulz, LendingTree Chief Credit Analyst

What kind of financial resolutions should you make?

When it comes to choosing your 2022 financial resolutions, our experts know exactly where to begin. “If you don’t have an emergency fund or the one you have is too small, that’s where you should start,” says Schulz.

Mantilla agrees. “The two best things you can do for your personal finance is to have an emergency fund of at least three months worth of expenses and to pay off your debt.”

If you haven’t yet built up your emergency fund or paid off your debt in full, get those plans in order first — and adjust your budget accordingly. The more money you’re able to earn, save or set aside in 2022, the more money you’ll be able to put towards your emergency fund and any outstanding debt.

While paying off your credit card debt could be achievable in a single year, don’t worry if you won’t be able to pay off big-ticket debt like student loans before 2022 ends. “Getting out of debt this year may not be possible,” explains Wang, “but by putting it down on paper, you share that you’re committed to that result.”

By resolving to save more money or pay off your debt, you’ll be able to take positive actions today that can help you achieve your goal — no matter how long it takes. “Your decisions should support that goal even if it’s not achievable this year,” says Wang. “Maybe it’s next year. Or in five years. But by setting that as a resolution, you highlight the goal in your mind.”

What if you already have a robust emergency fund and have paid off any outstanding consumer debt? It might be time to explore other financial goals, such as going on a dream vacation or setting aside extra money for a down payment.

“Once you’re out of debt and have an emergency fund, you can make resolutions to grow your net worth such as investing or learning about rental properties,” Mantilla explains. “But you can’t move forward towards other monetary goals if they’re built on a shaky foundation.”

How can you make financial resolutions during uncertain times?

The past few years have shown us that anything can happen — which means that you should be prepared for life to get in the way of your financial plan. However, it doesn’t mean that you should stop trying to achieve them. “I find that it’s helpful to have something you are working towards,” says Wang, “even if that goal is months or even years away.”

One of the best financial goals to work towards is a well-stocked savings account. “The pandemic has clearly shown us just how important these rainy-day savings are,” says Schulz. “We simply have no earthly idea what the future holds for any of us, so all we can do is prepare the best we can to protect our family when tough times come.”

There are many ways to protect your family and set them up for a solid financial future, including opening a 529 Plan for your children, creating a revocable living trust and purchasing an affordable term life insurance policy.

Mantilla has one more option to add to your list — although it might take some major life changes to achieve.

“If you live in a two-income household, one of the best things you can do financially is restructure your life so that your family can survive on only one income,” Mantilla explains. “If one person loses their job unexpectedly, you’ll still have the second income to live on and savings to use until that person gets a job again.”

Mantilla notes that living on a single income might not work for every household. “Living on one income isn’t the easiest and may include making some hard decisions such as moving to a lower cost of living area and trading in your cars,” she says. “In the long term, though, you’ll feel a lot less stress knowing you and your family are set financially and can weather most of what is thrown at you.”

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The most important thing to know about financial resolutions

No matter what kind of financial resolutions you make in 2022 — SMART goals, holistic goals or goals that require major life changes — pick resolutions you actually want to work towards that will set you up for financial success. If you’re not that interested in buying a home, for example, you won’t be motivated to save for a down payment. You might, on the other hand, be motivated to set aside money in the hopes that you can start a small business or retire early.

Once you pick a goal that works for you, keep working to achieve your goal — no matter what happens. If you can only save $50 one month instead of $500, that’s fine. If you have to put your student loans into forbearance after an unexpected job loss, that’s fine. As soon as your financial situation improves, start saving more money, putting more money towards your debt, investing more money into your retirement account or setting aside cash for that dream vacation.

“Even if you set an outlandish goal, if you’re consistently working towards it, by the end of the year, maybe you completed 50 percent of it,” says Mantilla. “Perhaps even more. That’s still a lot better than most people. You’re now farther along towards your ultimate goal than you would’ve been had you not set the goal in the first place.”

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About Nicole Dieker

Nicole Dieker has been a full-time freelance writer since 2012, with a focus on personal finance and habit formation. In addition to Haven Life, her work regularly appears at Lifehacker, Bankrate, CreditCards.com, and Vox. Dieker spent five years as a writer and editor for The Billfold, a personal finance blog where people had honest conversations about money, and is the author of Frugal and the Beast: And Other Financial Fairy Tales.

Read more by Nicole Dieker

Our editorial policy

Haven Life is a customer-centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our editorial policy

Haven Life is a customer centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less hard if they are a fit for your situation.

Haven Life is not authorized to give tax, legal or investment advice. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Individuals are encouraged to seed advice from their own tax or legal counsel.

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