5 key personal finance tips for 2022


With a lot of Christmas keys in hand and debt under their belt, it won’t be an easy year for Britons when it comes to personal finance and savings. Experts believe 2022 could bring higher bills, rising interest rates, and taxes that will dramatically affect your monthly budget. This is why analyzing your current situation and setting financial goals at the start of the year are very important.

So here are the five key personal finance tips for 2022.

  1. Pay off your debts

Ignoring and not paying your debts on time can affect your financial health and your credit rating. Banks can also add interest to your debts, further increasing your financial burden. Around 20% of Britons surveyed say they want to focus on this first. Since restrictions were lifted in the UK, Brits are spending more than they pay back.

According to the ONS, 27% of people were unable to pay an unexpected £ 850 bill out of the blue. The New Year is a good time to figure out how much debt you have and take the time to prioritize which debts you need to pay off first. Paying off high interest debt first is always a good idea to pay less interest. You should try to stick to your budget and prevent yourself from using unnecessary debt.

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  1. Save money on bills

Energy bills could rise significantly from April and interest rates are expected to rise 0.1%. According to the Resolution Foundation, taxes could reach £ 3,000 (US $ 3,975) per household and 2.25% points will be added to national insurance in April. Investment taxes for over £ 2,000 in dividends will rise 1.25% from April.

In addition, the one-year suspension of the triple state pension lockdown will give retirees a 3.1% increase in line with CPI inflation. But since the resolution was passed by the UK government, inflation has risen massively, raising concerns among retirees who depend on state pensions to cope with rising bills. So, you need to keep track of all your cash flow and set a monthly budget accordingly to limit debts and expenses.

  1. Favor savings

The sudden need for money can arise at any time and if you have extra funds left after paying all the bills and expenses, consider keeping them as emergency funds or transferring them to a backup bank account to reach. your other financial goals. However, a survey by Hargreaves Landsdown in September found that only 11% plan to keep their extra money in an emergency fund, while 40% are sticking with the giant of the streets with which they hold their checking account.

If you have extra money, you risk spending it on unnecessary purchases. You can also consider automating your savings as it saves time and doesn’t forget to save. There are various financial and banking apps that can make saving and withdrawing easier.

    There are various financial and banking apps that can make saving and withdrawing easier

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  1. Consider investing

People usually confuse saving and investing. Saving is all about keeping extra funds aside, while investing is about putting money into assets like mutual funds, bonds, and stocks in order to make the money grow. But before you make an investment, you need to consider your needs and goals. You can consider investing in various assets with different maturities depending on your short, medium and long term goals. You should also start saving or investing for your retirement.

  1. Boost your retirement savings

    Saving for retirement is one of the most crucial steps

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As you plan your finances, saving for retirement is one of the most crucial aspects. Regardless of your age, you should take steps to improve your financial well-being, consider maximizing your contribution to your retirement plans, and setting holistic retirement goals. Many experts recommend investing in a diversified portfolio of assets to mitigate risk with higher returns and consider investing in long-term assets and then sticking to them during good times and bad. .

Also read: How “Buy Now, Pay Later” Programs Can Create Serious Debt Problems

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