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What Personal Finance Tasks to Do ASAP in a New Year


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At the beginning of each year, we like to remind readers of some important financial housekeeping tasks. Even if your New Year’s resolutions have nothing to do with personal finance this year, these are key things to consider in January.

Admin note: this post was originally published in 2021; we’ve updated the numbers for 2022 but kept the original comments on the post.

Here are a few special notes for this year to help you plan:

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  1. As of January 2022, federal student loan payments will resume in May 2022. This CNBC article advises borrowers what to do while waiting to see if student loan forgiveness pans out this year.
  2. Interest rates are at record lows right now, so expect an increase in 2022.
  3. Housing prices increased almost 20% in 2021, as this MarketWatch article notes, and are likely to rise further in 2022, while probably not as quickly.

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Personal Finance Tasks to Do ASAP in a New Year

Review 401(k) Limits: According to Kiplinger’s, the 2022 limit on 401(k), 403(b), and most 457 plans is $20,500 (up from $19,500 in 2021). If you’re making regular contributions (such as having money taken directly out of your paycheck), make sure you’ve adjusted them accordingly if you want to max out your 401(k). It’s best to do this at the beginning of the year so you only have to do it once — if you do it in the middle of the year you’re either not maxing it out or you’ll have to change your contribution again next January.

{related: where to save (when you don’t know what you’re saving for)}

Review IRA Limits: Like last year, there is no change in 2022, as Investopedia notes. (The numbers have been the same since 2019, in fact: $6,000 for those under 50, and $7,000 for people 50 and older.

Reassess your debt: If your mortgage (or, in a typical year, student loan) payment amounts changed recently, figure out how you can round the required amount UP to an even number, and make the change accordingly (paying the extra toward principal). Do what you can — every little bit helps with principal (this calculator from Bankrate helps you see how much), and knowing that a memorable round number is coming out of your bank account helps you to know if your balance is sufficient.

{related: how to decide when to pay down debt — and when to save}

For example, if your mortgage payment is now $3,218, you could pay

  • an extra $282 toward principal each month (total = $3,500 each month)
  • an extra $82 toward principal each month (total = $3,300 each month)
  • an extra $782 toward principal each month (total = $4,000 each month)
  • or an extra $32 toward principal each month (total = $3,250 each month)

Psst: In honor of this series’ original title, Tales from the Wallet — here’s a mini hunt with wallets we love! They can be great gift ideas for the holidays.

If you have a 529 plan (or several), reassess your automatic contributions. Each state occasionally changes the amount you can give to get a state income tax deduction; if you want to max it out, then assess.

{related: not sure what to do first/next in your personal finance journey? here’s our money roadmap}

Reassess your subscriptions and other repeating payments and make sure you’re not paying money for services you’re not using.

Automate what you can: Consider setting up automatic investing, or automatic saving to amortize big expenses. I have a small amount of money automatically moved from checking to Ally bank accounts for:

  • Vacation fund
  • Insurance fund (since those can be large-ish bills that we only pay once or twice a year)
  • Depending on need, I’ve had automatic transfers set up to get the emergency fund back to where I want it to be, for health insurance deductibles (there were a few years there where we reliably maxed our deductible), separate accounts for little projects around Casa Griffin, etc.
  • With my business I also do automatic transfers for the yearly amount I’ve needed for accounting/legal advice and a few other large but irregular bills.

What personal finance tasks would YOU do ASAP in a new year, readers? What have you done already this year; what has this list inspired you to do?

{related: what was the best financial decision you made last year? (2018 discussion)}

Stock photo via Shutterstock / ESB Professional





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