Welcome to 2022! At this time of year, some of say “This is the year, I will (fill in the blank).” These resolutions are created with good intentions, but often don’t quite succeed. Sometimes the resolution is a little overly ambitious and sometimes because we do not see immediate results, we give up. The MFF team is here to help with simple “tips and strategies” (oh let’s not call them “resolutions”!) for your new year finances!
Our Director of Operations Mike says, “From a retirement standpoint, now is a great time to adjust your contributions to your 401k (or 403b), IRA or other retirement accounts. The limits you can contribute change from time-to-time and also if you are fortunate enough to have received a bonus or bump in pay at the end of 2021, it’s a great time to sock away some of it or even max out your contribution for the year so that you don’t need to think about it for the rest of the year.
Mike goes on to add, “If you have not started saving for retirement, make one of your 2022 resolutions to start saving now – one great way to dip your toe in as a beginner is to open an account with Acorns or Stash (which is super easy to do). And remember to check in with your Human Resources department for details about your employer-sponsored retirement plan and whatever match your company may offer. That’s free money for you!”
Our Director of Marketing and student loan guru Tori suggests, “If you have Federal Direct student loans, they have suspended (and not accruing any interest!) since March of 2020. These loans were to enter repayment in February 2022 but the Biden administration recently announced another 90-day extension, so payments will not resume until May 1st. Use the next 100 days to get prepared to re-enter loan repayment. This may mean adapting your spending plan (or budget) to add this line item back in or picking up a part-time job to help balance your spending plan. For many, this may mean paying down other consumer debt where interest is accruing, or if you do not have any other consumer debt and will not be pursing Public Service Loan Forgiveness or an income-driven repayment plan, go ahead and make payments on your loans as the payment will go straight to the loan’s principal, and in effect, reducing the total cost of the loan”.
Our Director of Education Jillian offers this as a possible resolution: “Commit to improving your financial knowledge through education. This could be by working with a financial coach, taking a class, interning or job shadowing, reading books and blogs, subscribing to podcasts. Gaining one small kernel of knowledge from any of these options will put you on the right path!”
Growth Strategist Steve says “Instead of new year’s resolutions, think of new year’s habits. Replacing your bad habits with good habits will make a big difference in the short-term and make a world of difference in the long-term!” What’s one of your “bad” financial habits you could easily break that would make a significant difference in your life down the road? Perhaps it is something as simple as swapping buying a $2.50 cup of coffee every day on your way to work with making your morning java at home instead? That’s upwards of a $12 to $15 savings each week, or over $600 a year! That $600 is a great start towards your building your emergency fund, paying down consumer debt, or investing (remember compound interest is your friend!). Start small and reap the bigger rewards!
Steve also offers the sage advice of “Just start and you’re halfway done”. Sometimes taking that first step is the hardest step of all. What is one small thing you can do today to start (or perhaps further) your personal road to financial independence? Is it starting a retirement savings plan with your employer like Mike suggests? Is it planning now for your federal student loans to enter repayment in May 2022 like Tori mentioned? Is it changing your spending habits in a small way? Or do you have a longer-term financial goal (buying a house, opening a business, etc.) that you can do one thing today to get you focused on that goal?
And finally, our Executive Director Judi takes a different approach to the New Year by choosing a focus word for the year and not a resolution. Her word for 2022? Preparation. What are things you can financially prepare for during 2022? For some, it might be preparing to purchase a car and understanding all the costs involved in doing so (think maintenance costs, registration fees, and insurance). For others, it might mean preparing to change jobs or careers (think understanding income taxes, employee benefits, training, or any additional costs you may incur as a result of a job change).
Whichever way you are choosing to say hello to 2022, the MFF team wishes you a very happy – and prosperous – new year!!
Becoming an MFF Fellow
Our Standards of Financial Literacy program is engaging, full of interesting information, and easy to navigate. Adapted from the National Standards for Financial Literacy developed by the Council for Economic Education (CEE), this robust curriculum features six short lessons on such important topics as earning income, understanding the value of saving and using credit. When completed, this program lays the foundation for becoming an MFF Fellow.
Becoming an MFF Fellow is the ticket to access additional MFF programs and opportunities for mentoring, networking, internships and real-world opportunities. These are the opportunities which allow MFF Fellows to continue their journey towards personal financial independence.
Learn more at morganfranklinfellowship.com.