Money has changed a lot in the past century. From bartering with beads and shells to melting down gold coins and pieces of paper to using a plastic card, so much has changed. Investing, saving, and spending all look much different than they did before. But what does this mean for 2022 and beyond? Here are some of the top personal finance trends for 2022.
How do you understand personal finance?
Personal finance is just that — personal. So there is no right or wrong way to “do” personal finance, as long as it works for you and helps you hit your money goals.
But, personal finance can be defined as a way of managing your money, plus saving and investing.
What are the 5 most important aspects of personal finance?
There are many aspects to personal finance. But the five most important aspects are:
- and protection.
In other words, how you make your money, spend it, save it, invest it, and protect it (plus protect yourself — think life insurance!) is important.
This may come as a shock, but the key to success in personal finance isn’t your investments or passive income — it’s your budget! Yes, your budget is the key.
Think about it this way; without a budget, you don’t know what you’re bringing in or what’s going out. So you can’t make choices and decisions based on anything.
You may overdraft your account one month, realize you’re investing too little for your retirement goals, and even be in massive amounts of debt if you really haven’t sat down and budgeted for your expenses.
So, in order to get your personal finances on track, you need to have a budget that works for you.
How can personal finance be improved?
Your personal finance habits can always be improved! And luckily, technology and advancements in money for the “average” person are improving every day.
For example, fractional shares are easier ways to invest in stocks, without spending money you don’t really have or worrying about building a portfolio.
As long as you go back to the main principles of personal finance and focus on making sure you’re reaching your money goals, you’ll be just fine.
Is the financial planning industry growing?
With personal finance comes financial planning — or looking at your entire financial picture and realizing what you need to achieve your short-term and long-term financial goals.
You can do this yourself, or with a professional financial planner. And because many people are looking to get more professional help when it comes to financial literacy, the financial planning industry is growing.
This can be a good thing — the more people that know about finances and can help you make better decisions for your goals, the better chance you have at being financially successful.
Will financial planners become obsolete?
Absolutely not, at least not anytime soon. However, because of the changes in our economy, habits, and personal lives, they will have to evolve to keep current.
But there will always be a need for financial advisors who help people make better money decisions.
Money Trends 2022
Now that we know what personal finance is, how it all works, and why it’s so important, let’s talk about the latest money trends of 2022.
People around the world are becoming more aware of the damaging impact that their habits and inventions have had on the planet. While there are eco-friendly initiatives for corporations and individual habits that can make big changes, the finance world is getting in on these important trends too.
Many banking companies and credit cards help fund oil and other industries that cause harm to the environment.
What if you could get an eco-friendly debit card instead? Your transactions could then be used to fund initiatives that want to improve the environment instead of harming it.
Related: How to Build a Green Home For Less
Creating a new financial system is something that evolves naturally with time. Where once people would use valuable objects they found to trade for something they wanted, now people can use their phones and a variety of types of money to purchase items.
This is where Cryptocurrency comes in — the latest of the personal finance trends. It’s gaining momentum and popularity. And people can buy, sell, and store their currencies in digital wallets.
There is some risk involved in the cryptocurrency world, but those who use it wisely could likely be set up for financial success in the future. And, more and more businesses and nonprofits are taking cryptocurrency directly as a payment option.
Better Options for Digital Payments
Other digital options include using digital wallets through…
- Apple Pay,
- Samsung Pay,
- and Google Wallet.
These options all allow you to connect your smart devices to a payment card like a credit card and scan at the cash register.
These options are more secure because they aren’t lost or stolen as easily as your credit or debit cards. The technology backing them is more secure and encrypted than older versions of credit cards as well.
And, unlike cards that have to be protected by certain wallets to avoid scanning scams, your phone can’t be hacked in person or online as easily.
Improved AI for Customer Service
When you think of artificial intelligence, you probably think of robots and drones, not computer programs that help you with problems. In the finance world, 2022 will bring in more use of these chatbots for basic customer service needs.
More complex issues can still be handled by people, but you’ll get faster, more reliable service from these AI programs than ever before.
These programs are being coded to be more intuitive and to respond in a more human way. It’ll be more difficult to discern if it’s a real person or program answering your questions. And for the introverts, no more having to call everyone to make changes!
Customized Service Offerings
Customization is the name of the game. Working with financial advisors to create a financial plan can help you succeed. And remember, stocks aren’t the only option on the market. Instead, people can choose from a wide range of services and products.
And, thanks to enhanced automated processes, banking institutions know more about your needs than ever before. With data mining in the retail sector, banks have picked up on this too. They use in-depth data about your habits to bring the right options to the forefront.
Being financially successful has always been about diversification. In 2022, you’ll see more options that allow people to put their financial eggs into multiple baskets. This means that it’s not about choosing just multiple stocks. It’s about finding other opportunities to invest.
Some of these options will be more volatile (like cryptocurrency), while others will be more stable, like investing in real estate. It’s important to leverage money so that it works for you and not the other way around.
More Side Gigs
The 9-5 job isn’t the gold standard for stability anymore. People are realizing that even the best jobs can go away. Having a sustainable side gig enables people more opportunities than they had with only one job.
In 2022, you’ll see more people looking for ways to improve their financial future by working freelance, building e-commerce stores, and more. The future looks bright in finance, and 2022 is just the start.
Personal Finance Trends: They Aren’t Going Away!
Personal finance trends have always been a thing, but these latest trends have been heavily focused on technological advances and how to make it easier than ever to manage your money.
I don’t see these “trends” going away any time soon, so be willing to make changes to your budget and finances to keep up with the times!
What do you think? What personal finance trends are you seeing? And are you investing in their potential?
AUTHOR Kimberly Studdard
Kim Studdard is a project manager for online entrepreneurs and small businesses. When she isn't spending time with her daughter and husband, or reading her growing pile of horror books, you'll find her working on her HR degree and working towards FIRE.