The 2022 New Year’s financial resolutions that Americans are trying to accomplish

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As we wait for the start of a new year, it’s natural to reflect on what worked (and didn’t work) this year and where we want to go next year, especially when it comes to our money. . Resolutions can be an exciting and motivating way to think about new goals and start working towards them.

Fidelity conducted a Financial Resolutions Study to find out more about what people think about their money and their biggest financial resolutions in 2022. Below, Select takes a look at the results of this study, and we’ve got some tips to help you reach them. resolutions.

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Save more money

According to the Fidelity Financial Resolutions Survey, saving more money was the number one resolution for respondents. Almost half (43%) said this was a goal they wanted to work towards in the New Year.

Building a nest egg can help you pay for big-ticket items – like a house, a vacation, a wedding, or even just one big-ticket item you really want – without taking on more debt. Having savings can also come in handy if an urgent expense arises.

If you’re looking to boost your savings in the New Year, it helps to start small, even if you’re only transferring $ 10 a week to your savings account. Starting small helps you build muscle to save money. That way, when you get pay raises, bonuses, and cash as a gift, you’ve already made a habit of saving and you’ll have a better chance of transferring that money to your savings account.

You can also consider automating this process instead of just manually transferring money to your savings. Relying on manual transfers leaves a lot of room for procrastination – and before we knew it, we had spent the money we intended to save. But when you set up direct transfers to your savings account, you skip that decision altogether. You can usually schedule direct transfers through your bank’s mobile app.

Finally, if you want to see your savings grow a little faster, you can opt for a high yield savings account instead of a traditional savings account. High-yield savings accounts, like the Marcus by Goldman Sachs online savings account or the Ally online savings account, earn you more interest each month than traditional savings accounts. Granted, you won’t earn hundreds of dollars in interest every month (unless you have a parcel money in savings), but the extra money you earn can help you reach your goals a little faster.

Pay off the debt

The Fidelity survey found that 41% of survey respondents expressed a strong desire to prioritize pay off the debt in 2022.

While there are many ways to strategically use credit cards, personal loans, and other forms of debt to earn rewards, fund a big purchase, and ultimately build your wealth, Debt can still be a financial and emotional burden for many borrowers. Those with student debt, for example, often cite that their high monthly payments prevent them from saving for other goals, like owning a home.

A popular strategy for paying off debt is called the snowball method. This involves paying more for your debt with the lowest balance while paying only the minimum on all of your other debts. Once that debt is paid off, you can move to the second lowest balance and repeat the process until you are debt free. This allows you to eliminate debt faster, which can make you feel fulfilled and more motivated to continue preying on others.

You can also consider using a balance transfer card to transfer high interest credit card debt to a card that offers an interest free period. With this 0% APR period, 100% of your payments will go to your balance instead of increasing interest charges, which can help you get off debt a little faster. The 0% APR period will vary depending on the credit card, but a good option is the Citi Simplicity® card, which offers an introductory 0% APR on balance transfers for 21 months from the date from the first transfer (after that the variable APR will be 14.74% to 24.74%; all transfers must be made within the first four months of opening the account).

Another good option is the Chase Freedom Flex℠, which offers an introductory 0% APR for balance transfers for the first 15 months after opening the account, then a variable APR of 14.99% at 24.74% thereafter. One thing to note is that there is an introductory fee of $ 5 or 3% of the amount of each transfer on transfers made within 60 days of opening the account. After that, either $ 5 or 5% of the amount of each transfer, whichever is greater.

Make sure you have a plan to pay off the balance before the interest-free period ends, to avoid being stuck with high interest charges.

Spend less money

The third most popular financial resolution for the new year is to spend less money overall – 31% of respondents indicated they wanted to achieve this goal.

Cutting back on your monthly expenses can free up money that you can redirect to other financial goals or things you actually love.

If you want to spend less next year, an important first step is to figure out where your money is going now. You can do this by going through your bank statements and noting your various expenses over the past few months. Or you can use a budgeting app like Mint or Personal Capital, which connects to your bank accounts and credit cards and automatically categorizes your transactions for you. This helps you better understand where you spend the most money. You can use this as a starting point to decide whether or not you want to keep spending or spend less in these areas.

One area where people tend to cut spending first is in subscriptions. It can mean unused gym memberships, streaming platforms that aren’t used too often, subscription boxes that aren’t so exciting anymore and others. You might be surprised at how much money you spend on subscriptions that aren’t used enough.

In some circumstances, you may decide to take more drastic measures to spend less money. This could mean moving to a city with a lower cost of living or finding a roommate to save on rent. Of course, those decisions will depend on your situation and what makes the most sense for you and your goals.

At the end of the line

As we head into the New Year, saving more money, spending less, and paying off debt are top priorities for many Americans. There are many ways to achieve these goals, but the most important step is to determine what is right for your personal situation. It will help you be successful as you work towards these goals.

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Editorial note: Any opinions, analysis, criticism or recommendations expressed in this article are the sole responsibility of the editorial staff of Select and have not been reviewed, endorsed or otherwise approved by any third party.

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