The New Year (and its resolutions) have landed. January is also Financial Wellness Month. For those reasons, we're keeping an eye on five financial trends we think you should know about for 2022. Hopefully, our research saves you some time.
1. Rising food prices
You may have already noticed an uptick in food prices at restaurants and grocery stores, as the cost of staple ingredients, like wheat, sugar, coffee, and meat, have increased higher than in recent years (thanks, in large part, to the pandemic). There are mixed opinions on what's in store for 2022, but it might be smart to prepare for the worst and hope for the best.
Plus, you'll want to be ready for other significant changes, such as loan payments resuming or rent increases, that may put even more of a squeeze on your budget. “I find people adjust their finances to their moment,” says Tania Brown, a certified financial planner and owner of Financially Confident Mom. “I’d advise them to create a gap in their finances now … make the change before it hits.”
2. More (and more complex) fraud
A recent Federal Trade Commission Consumer Sentinel Network report found there was a 45 percent increase in identity theft and fraud filings from 2019 to 2020. The alarming surge may continue in 2022.
“Cybercriminals are getting craftier,” says Brown. “The one thing I tell people—if you get an email, be very cautious. Even if it looks exactly like it comes from your bank,” she explains. The same applies to calls and text messages.
It’s best not to respond directly to a call or message you receive. Instead, look up the company’s contact information (don’t use the contact info from the message—it could lead you directly to the bad guys), and initiate a conversation on your own, if you think it's legitimate.
3. Tax adjustments
The IRS makes various cost-of-living and inflation-related adjustments each year.
Some of these could lead to tax savings and larger returns, such as the higher standard deduction and maximum Earned Income Tax Credit (EITC) amount for 2022; EITC is a refundable tax credit the federal government provides to some low-to-moderate-income workers. The 401(k) contribution limit also increased to $20,500, although the IRA limit remains at $6,000.
Brown also highlights the IRS’s Volunteer Income Tax Assistance (VITA) program as a potential resource. Each year, the program trains volunteers and offers free tax preparation and filing for millions of eligible taxpayers.
4. A focus on financial wellness from employers
“There’s a [growing] trend of supporting employees with financial wellness [resources],” says Brown.
MetLife’s 18th Annual U.S. Employee Benefit Trends Study 2020 found 68 percent of employers think increasing financial wellness is an important benefits objective.
Benefits can range from student loan assistance to help with estate planning or child care. But Brown adds that people don't always understand what they can access.
It may be worth asking your employer about all the benefits available to you, requesting a webinar to help explain your options, and advocating for more finance- and wellness-focused benefits.
5. Financial planning that incorporates a personal touch
“Finances are as much about behavior as numbers,” says Brown. “That’s a trend I’m loving with some of the apps—it’s a focus on self-awareness,” says Brown. “Let’s help people see their patterns and help them understand what good financial behavior looks like.”
From there, it may be easier to create new, positive habits. And that's what Upwise is all about.
Our app is designed to help you build positive financial habits, so you can make the most out of every dollar and feel more confident in what your money can do for you.