It’s certainly true that we’ve all had a rollercoaster ride financially over the last year and sadly 2022 looks as if the ups and downs will continue and we need to get prepared and protect ourselves as much as possible. With a little bit of planning we can make our lives a lot easier and certainly less chaotic financially – even if the pandemic ensures that every other part of our life is up in the air. It’s certainly reassuring that we can control at least this money part of our life.

What do we know and what can we do?

1. We are pretty sure prices will rise. The Government have predicted inflation will run at about 4% during 2022 and that means more or less everything we buy will cost 4% more than it did this year. Research suggests that will mean an additional £1,700 of spending over 2022 for the average household. This is tough, particularly if your income is fixed so make sure you are in full control of what you’re spending now and see if you can reduce anything before the price starts to rise. If you can’t then see where you can cut out spending to cover the essentials, then always do a budget so you know exactly what you need to spend throughout the year so you have a chance to plan for it and manage the peaks and troughs.

2. Employment – and there’s a plus and a minus there. We know average hourly rates are rising and jobs are available even if it’s not exactly the ideal job for you BUT if you get that job then the National Insurance you pay will rise by 1.5% in April so there will be less in the pay packet. All we can do here is to earn even more to cover the extra NI and that might mean an extra shift or some overtime or even a second job. All of these are an option currently as employers struggle to get staff.

3. Interest rates will certainly rise at some stage to help counter rising inflation so if you have any borrowings, reduce those as much as you can before they become more costly. It might also be a time to fix your mortgage interest rate for a couple of years and the sooner in the year you do this the better as mortgage companies will start to increase their rates in expectation of a base rate rise.

4. Think about protection. As you get protected from Covid with jabs, then think about protecting your money with some savings and investments. Apparently, there has been about £200 billion saved during lockdown so far, and if you haven’t yet started to put a little bit of money by then start that as soon as you can. Try to save enough to get you through another crisis or potential lockdown – say 3 – 6 months of your outgoings – so that you can sleep easy at night safe in the knowledge that you have enough to protect yourself and your family for a while. If you don’t know your monthly outgoings, then work that out immediately!

5. If you have managed to accumulate some savings now start to think about investing. Savings provide protection but they don’t provide wealth but investments do. Start to think longer term and beyond just one year or two. Plan for your long term financial future with some simple investments and create a wealth pot. Consider investing in property or shares or even starting a business from the kitchen table. Being in lockdown or even just spending more time at home gives you time to do some great on line courses in financial management or property investing – have a look at some of those.

We might not be able to predict what happens to Coronavirus but we can predict what happens to our money and so my New Year’s Resolution is ‘Use this opportunity to embrace some good money habits!’.

Want to learn more about managing your money successfully in 2022? Check out our online learning modules for the whole family!


Gill Fielding

Author Gill Fielding

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