Financial Goals to Set for 2022

Are you ready to set yourself on the road to a stronger financial future in 2022? In this segment of Backstage Pass, recorded on Jan. 7, Fool contributors Toby Bordelon and Will Healy discuss some of the top financial steps investors should take to have a financially stronger 2022.

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Toby Bordelon: You may be aware, bad fires lashing the Denver area last week. Over about a 1,000 homes destroyed in suburban areas of the city up to the north.

My brother-in-law’s family actually had to evacuate, they’re fine, their house is fine, so that’s good news, but not great news for a lot of families, losses are expected to reach $1 billion dollars for this. This is not great.

One issue that came out and I don’t know if I saw it today is about insurance. We all know construction costs have risen in the past couple of years. If you’re trying to build a house, [laughs] you’re probably very aware that.

If you’re trying to do renovations to your house, you’re probably very aware of how much materials and labor costs right now. One problem that is creeping up with this loss issue is that some homeowners in the Denver area may be looking at a situation with their costs to rebuild are higher than their insurance coverage.

What do you do there? That’s an issue. That’s not great. I’m looking at this and I’m thinking, looking at insurance is one thing you want to do regularly and it occurred to me, there may be other things that people should be doing regularly with our finances.

We’re at the beginning of the year so let’s use this terrible situation. Let’s use this bad situation as an opportunity to maybe do a personal finance reality check, something that’s probably good to do from time to time.

New year, great time to do it. People are making resolutions. You’re taking stock of things. I want to ask both of you, do you have one or two suggestions for people in terms of financial items that they might want to look at.

That they might want to review at the beginning of the year just to make sure they’re all set, the situation is where it needs to be and they’re not going to get some nasty surprises later in the year, perhaps.

Let’s do it ahead of time before you realize you need it. Let’s start with you Will. What do you think?

Will Healy: Well, I think you certainly have to look at it not only is it a new year, but also taxes are coming up in a few months at this point. I think you have to look at things. You want to maximize your IRA contributions.

Well, first of all, you want to budget it, and pay off most of your consumer debt if you have that, but assuming that’s all taken care of, you really need to look at avenues where you can save, you are maximizing your IRA contributions.

The Roth IRA ideally, do you happen to have an HSA? You want to maximize those contributions too.

I think you still need to do the basic blocking and tackling. Make sure your financial situation is stable and then start to build your savings.

Bordelon: Yeah. That’s a great point. At the end of the year, a lot of people look at their health insurance because you get a notice from your employer, “Hey, open enrollment, check this out.”

But like you said, a good time now if you didn’t do it then, look at your IRA, look at your 401K, look at your savings.

Sometimes, I don’t know offhand whether limits went up this year, but they do from time to time, and sometimes people never change that. You may be looking at a situation where maybe the limit of your 401K has increased a couple of times and you’re still in the lower level and you just haven’t dealt with that.

Now would be a good time to take a look at that to make sure you’re doing everything that you’re able to do, especially getting after that quarterly match rate, right? Free money is great money.

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