I would be entering 2022 richer if it weren’t for these 4 money mistakes

With 2022 around the corner, Ruby Layram takes a look at the money mistakes she made in 2021 that she won’t be taking into the new year.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

2022 new year concept image

Image source: Getty Images

Despite my efforts to ace my finances this year, I have made several money mistakes that mean my savings aren’t quite as large as they could be. As we approach the new year, I have taken the chance to evaluate my decisions and consider how I can kick 2022 off strongly!

Like many Brits, my lack of social life in 2021 has allowed me to make some serious savings. As well as this, I have used the past year to tweak my budgeting strategy, delve deeper into the world of investing and make a solid financial plan.

5 Stocks For Trying To Build Wealth After 50

One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.

Click here to claim your free copy now!

As a result, I can safely say that 2021 has been a positive year for my bank account! However, that doesn’t mean to say that I couldn’t be any better off.


What I did well in 2021

Before I delve into my money mishaps, let’s take a look at what I will be continuing in the new year.

Firstly, I started using the Plum money-saving app to save money every time I spend. I love to shop, so this has been a great way for me to add money to a savings pot without even thinking about it! I have also used 2021 to improve my budgeting skills, and I’ve significantly reduced my monthly expenses compared to what they were in 2020.

My best financial decisions in 2021 have been expanding my investment portfolio to include cryptocurrencies and opening a lifetime ISA. My ISA has gained 4.3% in value, which has significantly boosted my savings.

The money mistakes that I won’t be repeating in 2022

Despite my efforts, my savings pot could be considerably larger if I had made different decisions. Here are four financial mistakes that have hit my savings in 2021.

1. I was late to the ISA bandwagon

I opened my lifetime ISA in August 2021, eight months into the year. While I have seen some significant returns on my initial investment, my savings could be considerably higher if I had made the move in January.

I opened my lifetime ISA with Nutmeg as a mini-experiment to see what my returns could be. Since then, I have only invested £700 but have received a £200 return! This return includes government bonuses that are put into LISA accounts. Therefore, if I had opened my account back in the new year I would have received an extra bonus payment. As a result, the value of my account would be higher.


2. I didn’t add any dividend stocks to my portfolio

This year, my focus has been on increasing my cryptocurrency investments. This has largely been due to the increasing popularity of crypto and global conversations about making the asset more mainstream.

Although my crypto investments have performed well overall, investing in crypto over traditional stocks has put me at a dividend disadvantage. Dividends are a great way to accumulate passive wealth over time, but crypto investments do not pay dividends.

In 2022, I plan to increase my dividend portfolio to set myself up with an additional source of income for 2023.

3. I stuck with my low-rate bank savings account

Despite penning an article on the topic just last week, I missed out on high-rate savings in 2021. Throughout lockdown, I managed to stash away a considerable amount into my savings account. However, I stuck with the same account that I’ve had for six years that offers just 0.01% interest!

If I had moved my savings into an account with a higher rate, I could be entering 2022 with more money to my name! As a result, I have made the decision to move my savings to a different account provider in the new year. I will be choosing one of these top-rated savings accounts which all offer much higher interest rates.

4. I didn’t cash in on any credit card rewards

My fourth and final financial downfall of 2021 was missing out on the benefits that are offered by rewards credit cards. Rewards cards offer points or miles every time you spend. Over time, these incentives add up and can save you serious money on travel and other expenses.

Failing to make the most of these rewards in 2021 has meant missing out on serious savings on my travel in 2022. I have also missed out on some excellent cashback opportunities that could have helped towards my Christmas shopping!

With just two weeks until the new year, now might be a good time to take a look at your finances and work out whether you’ve made any mistakes that you could address in 2022.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

More on Personal Finance

Note paper with question mark on orange background
Personal Finance

Should you invest your ISA in a model portfolio?

Which model ISA portfolios offer both high performance and low fees? Hargreaves Lansdown, Interactive Investor and AJ Bell go under…

Read more »

Economic Uncertainty Ahead Sign With Stormy Background
Personal Finance

Is it time to exit emerging markets investments?

Investors may well be sitting on losses from emerging markets funds. Is it worth keeping the faith for a sustained…

Read more »

Personal Finance

Share trading? Three shares with turnaround potential

Share trading has been difficult in 2022, but which companies have turnaround potential? Jo Groves takes a closer look at…

Read more »

Man using credit card and smartphone for purchasing goods online.
Personal Finance

Revealed! Why Gen Z may be the savviest generation when it comes to credit cards

New research reveals that Gen Z may be the most astute when it comes to credit cards. But why? And…

Read more »

Environmental technology concept.
Personal Finance

The 10 best-performing sectors for ISA investors

The best-performing sectors over the past year invested in real assets such as infrastructure, but is this trend set to…

Read more »

Road sign warning of a risk ahead
Personal Finance

Recession risk ‘on the rise’: is it time for investors to worry?

A major global bank has suggested the risk of a recession in the UK is 'on the rise'. So, should…

Read more »

pensive bearded business man sitting on chair looking out of the window
Personal Finance

1 in 4 cutting back on investments amid cost of living crisis

New research shows one in four investors have cut back on their investing contributions to cope with the rising cost…

Read more »

Image of person checking their shares portfolio on mobile phone and computer
Personal Finance

The 10 most popular stocks among UK investors so far this year

As the new tax year kicks off, here's a look at some of the most popular stocks among UK investors…

Read more »