5 Financial Mistakes to Leave Behind in 2022

Happy New Year! It’s a new year, new you type of event, right? On your list, you decided to be more financially responsible. However, you don’t know where to start. You have crippling debt, live paycheck to paycheck, and can’t escape this hole. Here are the top 5 financial mistakes to leave behind in 2022!

1. Curb the Spending

This is the hardest for people because you see a great deal of things, and you *need* to stock up. This is where you need to curb your spending. If it’s a great deal on something you use regularly, you will need to budget for that.

Do not buy every deal you see because you will lose money in the long run. I’ve seen firsthand people who get things cheap but sit in a spare bedroom and never touch them, but it was a great deal. No.

This year you need to shop with intention. Will I use that within this timeframe? Are these on sale regularly? Do I need to purchase many, or would one do just for now?

2. Living on Credit

Put down that credit card! Whatever you do, do not use your credit cards. According to Forbes, the average American in Q3 of 2022 had over $6,000 in credit card debt. That was a 15% increase from 2021. 

It’s now time to retire your plastic card. It’s time to start living on the money you make and not use this borrowed money. Not only will your FICO score thank me, but you will thank me later down the road when you need the credit or loan. 

3. Living Paycheck to Paycheck

One of the biggest financial mistakes to leave behind in 2022 is living paycheck to paycheck. You are probably thinking, “Amanda, how in the world can I not live paycheck to paycheck when companies do not want to pay me a livable wage?” 

While that is a valid concern, that’s when you take matters into your own hands. You can go back to school part-time to learn a trade or start your venture on a career path. If schooling is not your thing, then you can start freelancing on the side. 

To be successful at freelancing is to know what you are good at or at least be a quick learner. That’s it! Nothing more or nothing less. 

4. Paying Off Debt With Savings

According to MarketWatch, the average American under 35 has $3,240 in savings. For most Americans, that barely would cover a month’s expenses. When a debt collector calls you to tell you, you owe them money, that doesn’t mean you should take the money from your savings to pay off your debt. 

Why? 

Let’s say in savings, you have $3,000, and a debt collector tells you, you owe them $2,500. So you decide to pay them right on the spot. Then a few days later, your car breaks down, and it will cost at least $1,200 to get it operational. You only have $500 in savings and need another $700 before getting your car worked on. That is a stressful situation to be in. 

If a debt collector calls you, you should always work out a payment plan that works for YOU. It would be best never to deplete your savings to get someone off your back. 

5. Not Having a Financial Plan

It would help if you always had a financial plan with your money, whether in the form of a budget or goals. You should only use your money willy-nilly with purpose because that is how you will not have anything to show for it. 

If you are new to the financial plan idea, create a budget for you to follow closely. This will allow you to see your problem areas and address them immediately. 

What’s Next?

Now that you had the top 5 financial mistakes to leave behind in 2022, it is time to start on the right foot in 2023. That means retiring those credit cards, having a financial plan, and making more money. 

If you like this content, you can view our financial section, where we talk about money! New financial content posts every Monday!