What is your personal finance decision for 2022? This is what readers hope

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

Here are some of their plans.

Usually, not a chore

As a 20-year-old college student and personal finance advocate, in 2022 I am excited to continue contributing the maximum amount to my Roth IRA to benefit from Compound, the Eighth Wonder of the World. I will also diversify sources of passive income, emphasizing the importance of planning for the worst, hoping to make the best by owning at least 20% of my cash portfolio, and most importantly, continuing to invest in myself outside the classroom in order to help boost investment returns and my mindset, which is the most valuable fundamentalist.

Since time in the markets trumps market timing, my goals are based on the concept of time and working together. This year, I’d like to work on including them in my lifestyle, to develop them as a habit, not just a chore or task. Through this, I hope to inspire my fellow students on campus to start sooner rather than later and not rely on an institutional education system that does not have a mainstream financial education curriculum. Let’s break the money taboo and enjoy the wallet process in 2022. It shouldn’t be scary when we are in complete control and have all the resources available at the click of a button in this day and age!

—Maya Gradelsky, New York

More income and stay frugal

Finding – and succeeding in – a better paying job, while keeping family expenses at current levels of the economy. Continuing to increase my retirement savings contributions using the dollar cost averaging, and making additional home loan principal payments.

—Ronald L. Bensley Jr., Renton, Washington.

ready to be corrected

My wife and I are in their fifties, so unless there’s a sudden sale on the beachfront property, don’t expect to benefit from the nest egg for another 10 years.

In 2022, given the complications in the market and the Fed’s promise to raise interest rates, we’re trying to stay ready for a correction without just cashing out of stocks and heading to the financial bunker.

The challenge is, given inflation, that holding liquidity in traditional risk-free assets is expensive. Not only do we lose more appreciation for the market, but inflation also fades, resulting in negative real returns.

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

If a correction occurs, we will lick our wounds like everyone else through our stock portfolio, but will also be able to shop the discounted “sell” prices available to growth names by selling TIPS to rebalance.

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

—Tom Pontes, Boston

ladder to retirement

I’m less than 10 years out of retirement, so I regularly rebalance my investments and transfer money from stocks and mutual funds to cash. For 2022, I plan to use some of this money to pay off a home loan. As interest rates rise, I will use the money from cash and cash registers to start building ladders of CDs and bonds with higher yields that will eventually fund my retirement.

—Richard Weimer, Baton Rouge, Los Angeles.

No additional risks

My husband and I aim to maintain our existing portfolio of stocks, bonds and real estate with a healthy cash reserve. Since we are both seniors, we have finally come to the point where we don’t need to take any more risks with our money. After decades of investing, we are in the right place to enjoy our wealth and good health for as long as possible.

—Judy Brasaw, Bigfork, Mont.

stock plan

I am a retired biologist and not a professional trader. My goal is to maintain or increase my net worth through stock investments. I have been involved in stocks, commodities and options for over 30 years. I have a retirement account from which I receive money every month. Half of that money goes to my brokerage account. My current portfolio consists only of stocks of large companies with a long-term uptrend. I don’t trade stocks until after a year, when necessary. I will be trading with companies whose direction or stability appears to be questionable and others that have been showing an upward trend for at least five years. I keep diversified. I care about the basic and technical aspects of the companies I buy.

—Richard Demmer, Newport, Tenn.

Self-insurance for our risks

My goals are to keep our portfolio rising faster than the annual rate of inflation and to generate enough dividends and premium income from selling covered calls and cash secured sales (which are options trading strategies) to cover our living expenses. To achieve this, I increased our exposure to equity risk by selling more shorts, which are bullish trades, and buying more dividend stocks and ETFs. Until recently, our equity investments accounted for about 30% of our liquid assets. With the increase in sales of cash secured sales, the cash available for circulation has decreased to about 40% of liquid assets. Being in cash means we’re taxed with inflation, but it hedges against a sharp drop in stock prices. I think a 6% inflation tax is cheap compared to a potential 20%-50% drop in stock prices. In other words, we use some of our money to self-insure our risk. We don’t want to suffer big losses and live with them for a long time because we are in the mid 70’s and early 80’s and have shorter investment horizons than younger investors.

—Donald Johnson, Jacksonville, Florida.

Three-step plan to increase savings

The most important personal finance goal for me is to increase my savings. Step 1: Increase your savings rate every month. Step Two: Stop trading in and out of stocks. Step 3: Identify and invest in a wide range of investment products, perhaps a high-yield savings account or mutual fund.

—James Carolina Jr., Estero, Florida.

New asset allocation

I plan to reconsider the diversification and asset allocation strategy. I’m now 46 and have been a disciplined investor since my first paycheck after graduating in 1998. However, now that saving for distant retirement isn’t nearly as “far”, it’s time to take a closer look at reducing our exposure to US-focused stocks and adjusting the mix Current investments and future contributions.

—Steve Conway, New Albany, Ohio

A future in coding

I want to build a strong crypto wallet this year. I have just started investing in crypto assets and I am looking forward to the big change.

— Abhishek Srivastava, Pune, India

looking abroad

1) Buying a second home abroad, possibly in Italy. This idea came from my wife, who is from Taiwan. I’ve been browsing real estate online, especially in Tuscany.

2) For 2022, we’ll see if it’s worth adding to our crypto account. When I lived on Maui a few years ago, I would go out with a small group for coffee every morning, and one of my friends would often talk about the Internet of Things and cryptocurrency. At first I thought investing in cryptocurrency was just a guess. In 2021, I opened a small cryptocurrency account to learn more about it and changed my perspective.

3) Avoid using the bulk of our major assets for a second home or other purchase.

4) Stay healthy – I got a booster shot last month.

—Bob Michaelson, Cape Coral, Florida.

Cut Debt, Save – and Enjoy

Three main goals:

Continue to pay off student debt. I created a debt repayment plan to consistently make weekly payments and reduce my debt severely.

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

Start saving money for a down payment on the house. I have struggled to find a safe stop-the-money investment vehicle that will give me a reasonable risk-reward ratio and have sufficient liquidity. I’ve come across an ETF designed to be a low-risk way to save for home down payments, but I find the 0.60% net expense ratio to be a bit high for me.

Bonus Objective: Save enough to go on vacation with my girlfriend!

—Nicolas Nelson, Bloomington, Minnesota.

charity match

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

Like most grandmothers, at Christmas I brag about things my children and grandchildren will enjoy but don’t really need. One day as delivery boxes piled up near my door, a catalog of humanitarian aid arrived by mail. What a difference between those souls and my life. The price of a pair of shoes would buy a pair of goats, providing the family with milk, meat and dignity for the future.

So, I’ve bragged again over my Christmas budget, happily buying chickens, rabbits, goats, and donkeys. Then it occurred to me, why don’t I do it all year long? Matching the Black Friday Instant Pot you don’t really need, he’ll buy six ducks. And I will think of them every time I use them – if I ever use them. I think knowing that the impulse buying cost will double will make me a more mindful consumer. And maybe I’ll budget a family vacation and match it up with an entire yard of creatures that will help feed many families for the long haul. Note: Grandchildren want to pick out their barnyard critters next year.

—Rose Williams, Columbia, MO.

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