4 Steps to Secure Your Financial Health in 2022

Adobe Man and Woman Holding House Key and Credit Card

With the economy in flux, it’s little wonder that 58% of consumers say saving money is one of their top financial goals in 2022, according to Mintel’s Financial Services in 2022 Report. Findings also indicate that one in two consumers plan to open at least one new account this year.

If you’re one of those people, here are a few ways to save that will support your other financial goals.

1. Start by Auditing Your Personal Finances

Figure out where you stand so you can make decisions for the coming year. Create a list of your assets and write down the balances of all accounts, including your bank accounts, retirement accounts, investment accounts and any other funds. Then do the same for your debts, including credit card, student loan, car loan, mortgage and so on. Use these figures and your projected income to create a budget.

“Proper management of your cash flow is important to ensure you’re maximizing your saving-to-spending ratio. High interest-rate debt, whether from a retail credit card or somewhere else, can take a strong hit at your finances over time,” says Thomas Racca, manager of personal finance management services at Navy Federal Credit Union. “Within your monthly budget, make sure you prioritize your bills, monthly expenses and this type of debt. While it might take some time, the sooner you can end high-interest payments, the better.”

How often you reevaluate your budget can change, depending on various factors, but you should try to check in on a monthly or quarterly basis. During these check-ins, look at your proposed budget and see how closely you’re sticking to it so you can make adjustments, if necessary. 

Another different method to budgeting and saving is setting up two checking accounts. Studies have shown this approach can be simpler and work for many. With the two-checking account system, you set up one checking account for fixed expenses, such as rent or mortgage payments, utilities or child care. The rest of your money can go into another account for discretionary spending, like groceries, dining out or entertainment. In addition to having two checking accounts, you also should set aside funds in an emergency savings account.

2. Make the Most of Your Credit Cards

As the Federal Reserve hints at interest-rate hikes this year, cardholders should start preparing as soon as possible. If you have credit-card debt, try to pay down as much of it as you can afford before rates jump. If it aligns with your payoff strategy, you may consider a balance transfer card. The best ones have no fees, low interest during the introductory period and a low rate when the intro period ends.

To that end, make sure you’re maximizing all the benefits of your existing credit cards. Look for free price-matching services or extras, such as extended warranties, purchase protections, free subscriptions, purchase or rental insurance. Many credit cards offer these often-overlooked perks.

If your card issuer has an online shopping portal, it can give you the ability to earn extra rewards beyond what you’d get for purchasing in-store or from a retailer’s website. Also consider how your earned points translate to redemption value. Your card’s benefits and rewards structures should match your spending habits and lifestyle.

3. Get a Jump on the 2022 Homebuying Season

Before the COVID-19 pandemic, the homebuying season typically lasted from spring to early summer. However, 2021 was anything but typical, with unprecedented competition for homes throughout the year. As a result, many Americans rushed into purchases or were forced to postpone their plans.

If you’re considering buying a home in 2022, make sure you’re ready to make an offer when you find a home you love. Reach out to a mortgage lender and a real-estate agent now to get a feel for the local market and get the ball rolling on pre-approval.

“Regardless of what the market looks like, we encourage Navy Federal members to begin by checking their credit score, understanding what they can afford and beginning the financing process early by speaking with lenders and using online resources,” said Rashalon Hayes, assistant vice president of field mortgage originations at Navy Federal. “Doing so will help buyers feel more comfortable with the financial considerations that go into purchasing a home and make the pre-approval and closing stages easier.”

4. Outsmart a Tricky Car-Buying Landscape

Supply-chain issues and the microchip shortage have sent the price of new and used vehicles skyrocketing. If you’re car shopping this year, work with your trusted financial institution to get pre-approved for an auto loan before you head to the dealership.

Keep More of Your Money

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