MESA, Ariz. — A new survey is reporting two out of three Americans have a bleak outlook when it comes to their 2022 finances. Many are blaming the dire outlook on inflation.
Local financial experts said moving into the new year is also piling on extra uncertainty. Some of the causes for that are higher interest rates around the corner, an unexpected job environment and rising inflation.
The annual inflation rate in the U.S. rose seven percent in December. That’s the highest since 1982. The new Bankrate survey is also blaming America’s concern over their finances on COVID-19.
Financial optimism is different by age, according to the survey. It’s highest among Gen Z, those born between 1997 and 2012. The optimism lessens among older generations.
TruWest Credit Union’s Mike Waldron said with the unexpected ahead this year, Arizonans should also remember we’re coming from a financial environment we were not used to either.
“It’s created a fear of the unexpected of where we’re coming from and where we’re going to, and it makes it hard to plan for the future and our budget," Waldron said.
The survey also found U.S. consumers are determined to get rid of debt. Waldron added the best way to start is a tried and true method, creating an accurate budget and sticking to it.
Waldron recommended looking back to pre-pandemic (2019) spending to calculate your upcoming budget. That's because the spending environment has been different including a year and a half of stimulus packages, rent and mortgage forgiveness holds and even impacts like working from home and not paying for gas. All of the above adds up and can create inaccurate personal financial projections for 2022.
If your spending is accurate for this year, Waldron said to look back at three months prior spending, but leave out December for extra holiday expenses.
“Once you get those spending, expenses and income, you make two columns," Waldron said. "You say, hey this is what I brought in. This is what is going out. You can color-code those items. You can rely on many apps that you can download and spreadsheets.”
The end goal as always is to spend less than your earnings. Waldron said this might be the year to make sure wants are truly needs, until the financial situation improves.
The best free budgeting app of 2022 is Mint, according to Investopedia.
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