"Financial Planning ... it's not always about money."

What Financial Habits Should Americans Change in 2022? Top Advisors Weigh In.

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David M. Brenner, ChFC®, CLU®

D. M. Brenner, Inc.
Phone : (858) 345-1001
Schedule a Meeting

With New Year’s Eve fast approaching, many Americans are preparing resolutions with the aim of improving their lives in 2022. Perennial favorites include hitting the gym, bidding farewell to sweets (keto diet, anyone?), and improving one’s finances.  


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You’ll have to look elsewhere for in-depth health advice—this is Barron’s after all—but we can help you sharpen those financial resolutions. With that in mind, we asked advisors and other wealth management experts for the habits Americans should consider changing in 2022. It’s part of The Big Q, our regular feature where we seek advisors’ best answers to challenging questions.  

Barry Ritholtz, chairman and chief investment officer at Ritholtz Wealth Management: You’ve got to have balance. Don’t react to every headline, to every twitch. If you have a financial plan, then think in terms of years and decades. I love showing people a 40-year line chart of the S&P 500 without the dates, and I ask them to show me where the 1987 crash is. They can’t. There are so many ways to distract yourself from the resolutions you make. That’s the challenge of being an investor. 

Here’s the flip side of that: Life is short, and we don’t know what the future holds. All these spending scolds… I hate the advice “Don’t buy a latte.” If you want a latte, buy it. But if a $5 latte is the thing between you and a successful retirement, then there’s something else wrong. Life is short. Don’t procrastinate, have some joy.

It’s never too early to plan on living to 100. [To do that], you need financial security, good health, a circle of friends beyond just your family. First, you should have a financial plan and update it regularly for good times and bad times. I also suggest maintaining healthy habits. Hiring a personal trainer may be one of your best investments. And get enough sleep every night.

In the last five years or so, I’ve spent more time on longevity planning. It started with a focus on being healthy. But one of the things we found was that people were moving into these retirement communities or homes and the only thing they had in common was that they were retired. As people get older and retire, if they don’t have a network of friends or family, they can get depressed. Depression is a big issue, especially among the elderly. You need friends, even if it’s just people you see casually a few times a year.

Meghaan Lurtz, professor of practice at Kansas State University and researcher of financial psychology at  Kitces.com: I would like people to talk more about their finances. People don’t do it. They don’t talk about how much money they make or spend. Some people don’t even talk to their spouses about it.

There’s this idea about medical professional anxiety where you may, for example, be embarrassed about this rash you have, and you are afraid of going to a doctor and you therefore don’t get the treatment you need.

People are usually really hesitant to talk about money or how much they are making. But when we don’t talk about these things we don’t discover important things like, “I’m not making as much money as I should.” So I think it’s important to have financial transparency with someone—with your spouse, an advisor or someone within your workplace. You need a certain level of financial transparency.

Chip Munn, CEO of Signature Wealth Strategies: In 2022, we should pay more attention to the taxes we pay. If you look at the average American, their largest bill is their tax bill. 

A lot of people focus on controlling spending. But for too many people that doesn’t include tax planning, and that’s something we can control to the extent that we are paying attention. With proper planning, you can minimize that, and it can be a big deal. Do you remember how much you paid in taxes last year? These little things add up. Treating it like an expense and paying attention to the rules available to you—be it credits or something else—is important. 

It’s become a bigger deal than it used to be. I’ve just been barraged about tax questions, particularly over the past quarter or so, because it seems like the rules are going to change. But so many people don’t know what their effective tax rate is or what taxes they’ve been paying.

Tony Keiser, financial advisor at RBC Wealth Management: My wish for Americans in 2022 and on is that they spend more time, energy, and effort developing an understanding of their own risk tolerance. The one thing that trips up people again and again is bad behavior, meaning they have a tendency to buy high and sell low. So if they spent more time considering their own risk tolerance and why they own what they own, then they’d have better outcomes.

I spend more time talking about this with clients than literally anything. It’s really a primary focus. If you look back at the global financial crisis, there were people who engaged in panic selling. There aren’t any do-overs for those kinds of mistakes. You can undo years and years worth of work and savings. 

Laurie Barela, founder and CEO of Vargas Wealth Management: If you’re looking to create wealth, you have to start with the “b” word in your vocabulary: budget. Money that is not allocated or does not have intention tends to be easily spent. It disappears. In my office, we help people get comfortable approaching budgeting from a new aspect. Some people say “Ugh, I don’t want to budget.”’ But it helps you develop a recognition about how much capital you have at the end of the year. If you budget, you can change your future.

I had one client say, “Oh, I don’t spend much on my credit card.” We did this exercise with her, and it turned out that she was spending about $60,000 per year. We were able to identify expenses she could cut back on and invest that in her retirement savings instead.

Editor’s Note: These responses have been edited for length and clarity.

David M. Brenner profile photo

David M. Brenner, ChFC®, CLU®

D. M. Brenner, Inc.
Phone : (858) 345-1001
Schedule a Meeting