Financial Resolutions
Money & Finances

Financial Resolutions for 2022

In honour of it being New Years Eve, I wanted to share my financial resolutions for 2022 and the future beyond. In 2020 I bought my first home. In 2021 I paid off my credit card debt. And what exciting progress will 2022 hold for me? I can’t wait to find out!

I’ve been giving New Years resolutions a lot of thought over the last few weeks. After knocking my biggest goals out of the park, I could sit back and relax and just enjoy my successes. But I am still not on track to retire – ever. I still have plenty of household costs that I need to prepare for. And if possible, I’d like to help my kids with their education when the time comes. Being a debt-free home owner is great, but I am nowhere near having the level of wealth and stability that would make those things possible. So to start building wealth and getting ahead, I have come up with a few resolutions to keep me on track.

Increase Credit Score

As I paid off debt, my score rose consistently. My debt to credit ratio improved, which I assume made the biggest difference. I use Borrowell and Credit Karma every week to keep an eye on my progress, and it’s slower that it was, but my scores are still moving up little by little. So my first resolution for 2022 is to increase my score to over 800. There is no immediate benefit to it, because I don’t expect to be applying for credit any time soon. But in 2025 when my mortgage is up for renewal, I expect interest rates to have risen. The best thing I can do to keep my mortgage payments manageable at that time is to go into it with an excellent rate. Then I should be able to qualify for the lowest rate available at that time.

In order to get to 800 I am mostly just going to stay consistent with paying my bills on time, keeping my credit card balance low and not taking on any new credit. I think this is a pretty easy financial resolution to stick to.

If you are working on improving your own credit score, this post may be helpful: What you need to know about your credit score.

Increase my income

Last spring I developed plantar fasciitis which made standing and walking very painful. In my retail job, there was only so much I could do to stay off my feet, so I decided to go down to 4 days per week to allow more time to rest. I effectively reduced my income by 20%. It has now been 8 months, and I am feeling a lot better most of the time. I am ready to add an extra day to my schedule, once in a while to start, but hopefully back to 40 hours by spring. My employer has also generally been better than average at giving raises when they are deserved. These changes should make a small but noticeable difference to my overall income.

And after a year of working on my blog, I am hoping to soon start turning a profit. It can often be hard to find the time to work on it, but I love writing, I’ve had a ton of really positive feedback, and I like to think I am helping others with a similar starting point as me. If you’ve enjoyed reading my posts, you can help me grow by sharing on social media, commenting, or checking out any links that look interesting to you. Interacting in any way tells various algorithms that you like what you’ve read and that they should show it to other people. I don’t expect to ever leave work to blog full time, but covering my hosting costs would be amazing!

Up my investments

My biggest goal for the coming year is to increase my investments significantly. Since August I’ve been putting $50/month in a TSFA with Wealthsimple Invest and seeing a nice return. I want to start investing $500/month plus 100% of my GST, tax refund or other unexpected bonuses. In the long term I would like to max out my TSFA contribution limit, although I expect it to take closer to 10 years to get there. But I am determined to build a retirement fund to take care of myself in my senior years. I am ready to see the market through ups and downs, knowing that for every dip there has always been a recovery, and that a long term investment strategy is the only way to grow my money.

I’ll admit that it is a big change in mindset to be putting “future Melissa” ahead of present wants. I really want to renovate my bathroom. I want to take a trip. Anywhere at all to just experience something different for a little while. There will always be a multitude of things I want to spend money on. But doing those things might mean that “future Melissa” wont be able to afford food and medications. Even with a paid off house, I don’t expect that CPP will be enough to cover expenses and enjoy my later years. So right now I am sacrificing my wants to make sure she can cover her needs. When money is tight, it is easy to forget about future me, but someday that will be the present, and I want it to be a good one.

Read about the beginnings of my investing journey here: Investing Mistakes and Lessons

What are your financial resolutions?

What change will you make this year, what will you prioritize? How will you make your life better today and in the future? And what can I do to help you towards those goals?

Cheers to health, wealth and happiness in 2022!

With Love,

Melissa

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