Here are some things financial advisers suggest avoiding in 2022
By Veronica Dagher, Dec. 28, 2021 11:34 am ET
When it comes to your money, sometimes doing nothing is the best thing to do.
Financial to-do lists abound at this time of year, and it’s always smart to check on the rules around charitable giving or set financial goals for the new year. Knowing what to skip is just as important, though—so consider this list of suggestions from financial advisers as a 2022 to-don’t list.
Don’t rush to pay off a low-interest mortgage
With inflation predicted to rise, paying off fixed-rate mortgage debt ahead of schedule might not make sense.
Don’t overpay for items because ‘supplies are limited’
Consumers might normally wait for a sale, or at very least shop around to get the best price, said Bobbi Rebell, a financial planner and personal finance expert at Tally, a credit-card debt management app.
Now, many retailers are putting language on their websites such as “only a few left” to push shoppers to click the “buy” button amid supply-chain shortages, shipping delays and rising inflation. Retailers also often follow up with targeted emails and text messages warning us that say, the pajamas we love will be gone if we don’t buy them immediately.
Don’t succumb to the pressure.
Don’t track your spending down to the dollar
Tracking every last dollar of your monthly spending can feel empowering at first but is hard to sustain. Using a simpler approach such as designating 50% of your paycheck for essentials such as rent, 20% for savings, and 30% for everything else.
Don’t fall prey to FOMO
You may feel a pang for not owning cryptocurrencies or the latest stock sparking conversations on Reddit, but don’t feel the need to jump in. It may feel like a wise choice to get in, but chasing hot stocks often leads to underperformance in your returns as their outperformance won’t last forever, he said.
It’s fine to stick with time-tested investment strategies, such as a low-cost, well-diversified investment portfolio of stocks and bonds.