IT’S TIME to be optimistic about the future — so say the majority of those surveyed for Fidelity’s recently released 13th Annual New Year’s Financial Resolutions Study. Not only are 62% of Americans optimistic about the future, but 72% are confident that they will be in a better financial position in 2022.
I can’t think of a better way to start the new year. And, why not launch the new year with a few financial resolutions, as did a majority of those surveyed? Their top choices? “Save More Money” (43%), “Pay Down Debt” (41%) and “Spend Less Money” (31%).
One out of two (51%) who are planning to save more money in 2022 are pursuing long-term goals, such as retirement and health care.
Of course, if you are a regular reader, you know that I like hearing that people are saving for retirement. And, I especially like hearing that the majority (62%) of younger people (age bracket of 18 to 35) plan to increase their retirement savings in 2022. Their longer investor horizons give them leverage that older people simply don’t have: the math of compounding.
Although I’d like to see an even higher percentage, it’s still good news when it comes to younger people, especially in light of a recent Bankrate.com survey that found 52% of American workers saying they were behind on their retirement savings, with another 16% answering that they didn’t know if they were on track or not.
Before leaving the topic of resolutions, the best ones, in my mind, are those that are concrete enough so that you can actually fulfill them.
This one is for everyone: Four times a year, review your financial goals to see if you are on track to meeting them. To make this resolution happen, schedule specific dates. For example, you will receive month-end statements for December during the first few weeks of January. Mark your calendar for the second Wednesday after each calendar quarter end: Jan. 12, April 13, July 13, Oct. 12.
Here’s one for 401(k) participants: Before Jan. 7, review your 401(k) to make sure you are maximizing the company match. A recent MagnifyMoney survey found that of those working Americans who do contribute to their company’s retirement plan, 12% don’t put in enough to receive the company’s full match.
And, another one for parents of school-aged children: Create a monthly “financial education day.” Pick the first Saturday of each month to engage in a financial literacy game. Choose financial topics that you wish you knew more about when you were growing up.
For example, for grade school children (kindergarten through fifth), abcya.com offers Money Bingo for sorting money and Dolphin Dash for counting it. For those in fifth through eighth grade, there are games like Hot Shot Business, which teaches you to start and run a business, and Break the Bank, where you can learn about banking and debt. For high schoolers and beyond, offerings include Misadventures in Money Management and The Stock Market Game.
And another: Before January comes to a close, sign up for Invest in You: Money 101, a free eight-week program produced by CNBC and Acorns, the financial wellness app.
Finally: Fidelity has a Money Personality Quiz, which can give insight into why you make the financial decisions you do.
Being optimistic about 2022 is a good thing. Even better is bolstering that optimism by increasing the financial knowledge of you and your family.