WalletHub's 10 top financial resolutions for 2022

MINNEAPOLIS — Editor's note: The video above originally aired Dec. 16, 2021. 

The turn of a calendar year can trigger all kinds of feelings, and launch a myriad of resolutions to make the next 12 months more enjoyable and manageable. 

And while losing weight, working out, and cutting down on vices are frequently at the top of the resolution board, personal finance website WalletHub says making goals that involve money can make life not only more stable and sustainable, but more enjoyable and worry-free. 

WalletHub says 92 million Americans will make resolutions for 2022 that involve their finances. Of them, only 42% expect to keep their vows for an entire year, not a good sign for the country's money management health. 

To help out, WalletHub Managing Editor John S. Kiernan compiled a list of the top ten money resolutions that can impact your life. 

10 Financial Resolutions for 2022

1. Make a realistic budget & stick to it
2. Pay bills right after getting your paycheck
3. Add one month’s pay to your emergency fund
4. Use different credit cards for everyday purchases & debt
5. Repay 20% of your credit card debt
6. Get an A in Wallet Literacy
7. Sign up for credit monitoring
8. Make sure you have enough insurance for a catastrophe
9. Focus on physical health, given its strong connection to financial health
10. Look for a better job

Here is a more detailed breakdown (a playbook of sorts) that can help with all ten:

Top Financial Resolutions for 2022 & How to Keep Them, according to WalletHub:

1. Make a Realistic Budget & Stick to It:  

   WalletHub advisors say the best way to make a budget is to gather your bills from the past few months and make a list of all your recurring expenses. Then rank them in order of importance, with true necessities such as housing, food and healthcare obviously taking the top spots. After that, you can simply cut from the bottom of your list until your take-home exceeds what you plan to spend. Finally, keep track of your monthly spending throughout the year to make sure you’re abiding by your budget.  

2. Pay Bills Right After Receiving Your Paycheck: Taking care of monthly obligations before letting yourself indulge in any luxury expenses is a helpful budgeting strategy. It gives you a better sense of what you can truly afford and what you can’t. It also helps you avoid ever having a late payment reported to the major credit bureaus, which is one of the easiest ways to damage your credit score. Furthermore, paying your bill early improves your credit utilization, and thus your credit score, by reducing the balance listed on your monthly statement.

   WalletHub recommends setting up two automatic monthly payments from a deposit account: one for right after payday and another for a couple days before your monthly due date. The second payment will help you avoid interest on any purchases made between your first payment and the end of your billing period.  

   To learn more about keeping your payment train on schedule, check out WalletHub's 8 Tips For Never Missing A Due Date.

3. Add One Month’s Pay to Your Emergency Fund: Almost half of Americans do not have a rainy-day fund, according to the Financial Industry Regulatory Authority. Like someone without insurance, people who lack an emergency fund are tempting fate, putting themselves at risk of financial catastrophe in the event of unexpected unemployment or major medical expenses. A lot of people found that out the hard way over the past couple years.                         WalletHub recommends ultimately building a fund with about 12 to 18 months of take-home income. But it’s important to understand that won’t happen overnight.  
4. Use Different Credit Cards for Everyday Purchases & Debt: The Island Approach involves using different accounts to serve different financial needs, as if they are a chain of islands. The most basic example is using a rewards credit card for everyday purchases and a 0% APR cardfor balances that you’ll carry from month to month.

   Doing so enables you to get the best possible terms on each card, rather than settling for average terms on a single card. It will also help you reduce the cost of debt, considering everyday purchases won’t be inflating your average daily balance.  

5. Repay 20% of Your Credit Card Debt: WalletHub says Americans owe way too much credit card debt: roughly $8,000 per household. That debt is extremely expensive, too. Something eventually has to give. Most would rather have that be their outstanding balance, paid down on your own terms, than your ability to afford monthly minimum payments and, in turn, your credit score.  

   Some of the other steps mentioned – including budgeting, automation and the Island Approach – will help in terms of reducing future reliance on debt.  

6. Get an A in Wallet Literacy: Financial literacy levels in this country are far too low, according to WalletHub editors, and they appear to be headed in the wrong direction. As of 2021, roughly 43% of Americans grade their financial know-how at a “C” or below, according to the National Foundation for Credit Counseling. In 2010, that figure was at 34%.

   Start 2022 by taking the website's WalletLiteracy Quiz and getting a baseline score. Then, throughout the year, study the areas where you struggled and periodically re-test yourself to gauge your progress.  

7. Sign Up for Credit Monitoring:  People often assume their credit scores tell the full story, but that's just not the case. For starters, as many as one in four have an error on their report that could affect their credit score, according to research by the Federal Trade Commission. Reviewing at least one of your major credit reports on a regular basis will allow you to spot signs of fraud before they get too serious. WalletHub says 24/7 credit monitoring can help. Sign up for free credit monitoring here. 
8. Make Sure You Have Enough Insurance for a Catastrophe: COVID has shown just how fragile and precious life is. And if other people depend on you, the pandemic should illustrate the importance of making sure those people are taken care of if you’re not around or able to work. In particular, that means taking steps such as purchasing life insurance and disability insurance, in addition to making sure you have enough health insurance coverage.  
9. Focus on Physical Health, Given its Strong Connection to Financial Health: There is a clear connection between physical, emotional and financial health, and it was particularly apparent in 2021. For starters, the average person spends about $5,177 on health care each year. Money and the economy are also our biggest sources of stress, according to the American Psychological Association. And people who get regular exercise tend to have better credit scores.
10. Look for a Better Job: Sometimes people get so caught up in spending less and saving more that they forget to address the other side of the equation: how much we earn. But WalletHub asserts the benefits of finding a higher-paying job could actually end up outweighing everything else put together.

The WalletHub financial resolutions list was created from data gathered in a nationally representative poll of over 330 people in the U.S. The survey was designed to see what types of resolutions folks are making for 2022, especially in terms of personal finance. Researchers also asked about people’s motivations for making resolutions and their their expectations of success.  

For more on the survey and its methodology, and making and keeping those financial resolutions, check out the WalletHub website.