5 Things I Learned About Money in 2022

It’s that time of the year again! Time to overdecorate our apartments, go above and beyond while baking (or attempting to) holiday-themed treats, and reflect on what the past 11 or so months have taught us—all while listening to Mariah Carey’s “All I Want for Christmas Is You” on repeat.

Here are a few things that I learned this year that I think will stick with me (or in some cases, haunt me) next year.

Inflation and Rising Interest Rates Are Terrible

Remember when inflation reached 7% and we thought that was high? This year, we watched it reach new heights—and it forced us to find new ways to stretch our paychecks (hint hint, nudge nudge Morningstar). And in response, the Federal Reserve has been raising interest rates to combat inflation. Although analyst Preston Caldwell expects Fed rate hikes to moderate next year, there are some valuable lessons to take with us into the new year:

1. Pay off any long-standing credit card debt.
2. Revisit your core portfolio and make sure it still aligns with your goals.
3. Make sure there’s room in your budget for the higher costs of goods and services.

Read more on this topic:

• Your Inflation Toolkit
• How to Invest Your Money as the Fed Raises Interest Rates
• Economic Outlook: A Possible Turning Point in the Struggle to Tame Inflation in 2023

Budgeting Is No Joke

On my list of coping mechanisms, “treating myself” is at the top. I’m also my father’s daughter, so concert tickets are never an “if,” but always a “what time is presale again?” (Don’t worry, I somehow managed to secure Taylor Swift tickets.)

When faced with stressful situations, looming FOMO, whatever it may be, I find that peace can be found in the “Add to Cart” button. But given the circumstances mentioned above, creating and sticking to a budget is key. Here are some things to keep in mind:

1. There’s room for the things you enjoy in your budget—you just have to make it and set appropriate limits.
2. Familiarize yourself with the difference between the “needs” and “wants” in your life.
3. Keep an emergency stash you can dip into in case the worst happens.

Read more on this topic:

• Got the Urge to Splurge? 4 Steps to Overcome Your Overspending Habit
• Hate Budgeting? Try Rethinking It.
• Short Answer: How to Create a Budget

Always Have a Plan to Pay Your Debt

Along with millions of others, I’ve been hanging onto the hope for student debt relief since the program was announced in August. Fast forward to today, and the program is blocked and another payment pause has been announced until June 30, 2023. If this has taught me anything in this adult life, it’s this: Always be prepared. Nothing is guaranteed, and having a plan will help brace you, and your money, for whatever life throws at you. While we wait, here are some things you can do:

1. Figure out what method works best for you when it comes to paying down debt.
2. Focus on other debts you may have with high interest rates, like your credit card bill.
3. Use the student loan pause to build up other resources if you can, like an emergency fund.

Read more on this topic:

• How to Get Out of Debt
• Short Answer: How to Create an Emergency Fund
• 7 Ways to Improve Your Credit Score

Ignore the Noise

This is something that Christine Benz told my co-star and colleague Katherine Lynch when we were discussing the future of our retirement savings. While we filmed the video, she told us to “ignore the noise,” because that’s all it really is. Months later, and it could not be any more relevant. When it gets too loud, I remind myself of the following:

1. I’m in the accumulation phase of my investing life, and I still have time to add to my savings.
2. I can’t predict the market, but I can revisit my savings rate and portfolio.
3. The market can be volatile, and it can be overwhelming. I need to remember my financial goals and stick with my plan.

Read more on this topic:

• A Down-Market Survival Guide for Your 20s, 30s, and 40s
• Quantify and Set Financial Goals
• Train Your Brain to Handle Market Uncertainty

Crypto Gave Us a Major Reality Check

My fellow Gen Z/Millennial cuspers and I are in the midst of building our financial foundations. The secret to a solid foundation? Tangible investments.

Recently, my colleague Susan Dziubinski told me how important it is for my generation to understand the difference between a speculative move and an investment move. The collapse of FTX in November serves as a powerful reminder that investments as volatile and unpredictable as cryptocurrencies can be costly.

When you have your foundation in place and are on track to meet your goals, then you can maybe afford to speculate—but only with money you can afford to lose entirely.

Finally, I leave you with this: a few resources to help you prepare for or use in any of the conversations you may find yourself in at the holiday dinner table.

• How to Avoid Arguing Over Money
• When Do You Get Kicked Off Your Parents’ Insurance?
• Best Investing Podcasts for Beginners
• 7 Great Investing Books for Beginners