What is your personal finance resolution for 2022? This is what readers expect

We wanted to know what Wall Street Journal readers are doing to prepare for the new year in terms of money, so we asked them about their personal financial goals and the steps they’re taking to achieve them.

These are some of their plans.

A habit, not a chore

As a 20-year-old college student and personal finance advocate, in 2022 I look forward to continuing to contribute the most to my Roth IRA to take advantage of compounding, the eighth wonder of the world. Additionally, I will diversify my sources of passive income, emphasize the importance of planning for the worst, hoping for the best by having at least 20% of my portfolio in cash, and most importantly, continue to invest in myself outside of the classroom to help drive the return on my investment and my way of thinking, my most precious asset.

Since the time in the markets exceeds the market time, my goals are based on the concept of time and joint work. This year I would like to work on including them in my lifestyle, developing them as a habit, not as a simple chore or task. Through this, I hope to inspire my fellow students on campus to start sooner rather than later and not be dependent on the institutionalized education system without a general financial education curriculum. Let’s break the money taboo and enjoy the portfolio process in 2022. It shouldn’t feel daunting when we are in full control and have all the resources available at the click of a button in this day and age!

—Mia Gradelski, New York

More income and stay thrifty

Find and succeed in a better paying job, while keeping household expenses at current economic levels. Continue to increase my contributions to retirement savings by using dollar cost averaging and making additional principal payments on our home loan.

—Ronald L. Bensley Jr., Renton, Wash.

ready for a fix

My wife and I are in our 50s, so unless there’s a surprise sale on waterfront properties, we don’t expect to tap into our savings for another 10 years or so.

In 2022, given the multiples in the market and the Fed’s promise to hike rates, we are trying to get ready for a correction without just taking money out of stocks and heading to the financial bunker.

The challenge is that, given inflation, maintaining liquidity in risk-free traditional assets is expensive. Not only do we miss out on further market appreciation, but inflation also drives it down, leading to negative real returns.

So this year, for the first time, we are transferring more liquidity to TIPS [Treasury inflation-protected securities] mitigate the impact of inflation.

If a correction occurs, we will be licking our wounds like everyone else with our stock portfolio, but we will also be able to buy at the discounted “offer” prices available on growth names by selling the TIPS to rebalance.

And if inflation continues to rise without a correction materializing, the hope is that our TIPS portfolio will at least keep pace.

—Tom Pontes, Boston

A ladder to retirement

I’m less than 10 years away from retirement, so I regularly rebalance my investments and move money from stocks and mutual funds to cash. By 2022, I plan to use some of that cash to pay off my home loan. As interest rates rise, I will use the cash and pools of money to start building ladders of higher yielding CDs and bonds that will eventually fund my retirement.

—Richard Weimer, Baton Rouge, The.

No additional risks

My husband and I aim to maintain our current portfolio of stocks, bonds, and real estate with a healthy cash reserve. Since we are both seniors, we have finally reached the point where we don’t need to take any more risks with our money. After decades of investment, we’re at the sweet spot of simply enjoying our wealth and good health for as long as we can.

—Judy Brassaw, Bigfork, Mont.

A plan for equities

I am a retired biologist, not a professional trader. My goal is to maintain or increase my net worth through stock investments. I have dabbled in stocks, commodities and options for over 30 years. I have a retirement account that I receive money from every month. Half of that money goes into my brokerage account. My current portfolio consists solely of large-cap stocks with a long-term uptrend. Trade off stocks only after a year, when needed. I will trade companies whose trend or stability seems in question and others that show an upward trend for at least five years. I stay diversified. I pay attention to the fundamentals and technical aspects of the companies I buy.

—Richard Demmer, Newport, Tennessee.

Self-insurance our risks

My goals are to keep the value of our portfolio increasing faster than the annual rate of inflation and to generate sufficient dividend and premium income from the sale of covered calls and cash-backed put options (which are option trading strategies) to cover our living expenses. To accomplish this, I have been increasing our exposure to equity risks by selling more put options, which are bull trades, and buying more dividend stocks and ETFs. Until recently, our equity investments represented around 30% of our liquid assets. With the increase in sales of cash-backed put options, our cash available for trading has been reduced to approximately 40% of liquid assets. Being in cash means we are being taxed for inflation, but it protects us against a sharp drop in stock prices. I think a 6% inflation tax is cheap compared to a possible 20% to 50% drop in stock prices. In other words, we are using some of our cash to self-insure our risks. We don’t want to take big losses and live with them for a long time because we are in our 70s and 80s and have shorter investment horizons than younger investors.

—Donald EL Johnson, Jacksonville, Florida.

A three-step plan to increase savings

My main personal finance goal is to grow my savings. Step 1: Increase my savings rate each month. Step 2: Stop trading in and out of stocks. Step 3: Identify and invest in a broader range of investment products, perhaps a high-yield savings account or mutual fund.

—James Carolina Jr., Estero, Fla.

A new asset allocation

I plan to review our diversification and asset allocation strategy. I am now 46 years old and have been a disciplined investor since my first paycheck after graduation in ’98. However, now that saving for a distant retirement isn’t that “far off,” it’s time to take a closer look at reducing our exposure to US-focused stocks and adjust our mix of current investments and future contributions.

—Steve Conway, New Albany, Ohio

A future in crypto

I would like to build a powerful crypto portfolio this year. I just started investing in crypto assets and am looking forward to the big change.

—Abhishek Srivastava, Pune, India

looking abroad

1) Buy a second home abroad, probably in Italy. This idea came from my wife who is from Taiwan. I have been looking for real estate online, mainly in Tuscany.

2) By 2022 we will see if it is worth adding to our crypto account. While living in Maui a few years ago, he would go with a small group for coffee every morning and a friend would often mention the Internet of Things and cryptocurrencies. At first I thought that investing in cryptocurrencies was pure speculation. In 2021, I opened a small crypto account to learn more about it and changed my mind.

3) Avoid allocating the bulk of our main assets to a second home or other purchases.

4) Stay healthy: You got a booster last month.

—Bob Michaelson, Cape Coral, Florida.

Reduce your debts, save and have fun

My three main goals:

Keep paying my student debt. I created a debt payment plan to make consistent weekly payments and aggressively reduce my debt.

Make the maximum contribution to my Roth IRA. I plan to contribute $115 a week to my Roth, which will maximize the fund for the year and give me a great start in saving for retirement.

Start saving money for a down payment on a house. I have struggled to find a safe investment vehicle to park cash that gives me a reasonable risk-return ratio and has adequate liquidity. I came across an ETF that is designed to be a low-risk vehicle for saving for a down payment, but I think the 0.60% net expense ratio is a bit high for my liking.

Additional Goal: Save enough to go on vacation with my girlfriend!

—Nicholas Nelson, Bloomington, Minn.

charitable party

My financial goal for 2022 is to be more generous. I hope to match every personal splurge this year with a gift to a charity that addresses world hunger.

Like most grandmothers, I splurge at Christmas on things my children and grandchildren will enjoy but don’t really need. One day, as delivery boxes were piling up outside my door, a humanitarian aid catalog arrived in the mail. What a disparity between those lives and mine. The price of a pair of shoes would buy a pair of goats, providing a family with milk, meat, and dignity for the future.

So, I splurged again and matched my Christmas budget, happily buying chickens, rabbits, goats, and a donkey. So it occurred to me, why not do it all year round? Matching the Black Friday Instant Pot I don’t really need will buy six ducks. And I will think of them every time I use it, if I ever use it. I think knowing that an impulse buy would cost twice as much will make me a more attentive consumer. And maybe you budget for a family vacation and combine it with a whole pen of critters that will help feed multiple families for a long time to come. PS The grandkids want to pick their own barnyard critters next year.

—Rose Williams, Columbia, Missouri.

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