Top Financial Lessons Learned From 2022 – EP 270

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History does repeat itself and there’s not a lot you can do to keep it from happening other than knowing what to do and how to prepare for it. This episode covers our Top 4 Financial stories of 2022 and what they taught us. Let’s reflect, have a deep dive, and learn as we go back to some of the financial news we’ve heard throughout this year. 

Long-term consistency in investing, intentional spending, and earning. Those are the unsexy solutions to your problems.

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  • Learning our lesson. For some of us, it takes many mistakes, lectures, and even punishment like standing in the corner, or getting our mouths washed out with soup to finally learn our lesson – while others just need to watch their siblings do all the dumb stuff and then choose the opposite. Whichever category you fall into. We’ve got another opportunity to learn some lessons and make different choices – but this one doesn’t involve soap or spankings AND it promises to be relatively FUN! its…

  • The One Week Spending Makeover. On January 2-6, we are hosting a free one-week challenge with daily live lessons with daily live lessons delivered in a pop-up Facebook community and to your inbox. The goal of this challenge is that in 5 days or less you will have a clear picture of your past spending, a foundation for values-based spending, and a plan to improve your spending in a way that makes you happy, not guilty. If you want to kick off your 2023 financial goals with a bang then join us for the one-week spending makeover at frugalfriendspodcast.com/makeover. And if you’re hearing this episode during or after January 2-6, don’t fret, there will be a replay so you can still get all the goodness! Again that’s frugalfriendspodcast.com/makeover to transform your spending without giving up everything you love!

Why is inflation still so high right now, and when can we expect it to finally stop?

The buzzword that has kept everyone on the edge of their seat: “Inflation.” But what is it really all about? When does it end? Yahoo News answers our questions through a deep dive on the current situation of inflation and hopefully it eases your worries and find hope in the midst of it.  

What Jen + Jill have to say:

Jen advises to consider a diversified investment portfolio as your long-term solution to an unpredictable inflation. You should focus on your full emergency fund, pay off as many of your credit cards as possible and get creative with your finances. 

If you want to learn more about recession-proofing your finances and get some tangible tips on inflation, you can go ahead and listen to Ep 244 Recession Proofing Your Finances with Meghan Rabuse

8 Facts You Must Know About Bear Markets

Our second lesson of this year is Kiplinger’s 8 Facts You Need to Know About Bear Markets and the lesson here is: Bear Markets still exist. You’re doomed to repeat history if you don’t learn from it.

What Jen + Jill have to say:

Jen explains that when they take a broad market index such as the S&P 500 (they use it as a bench market) and it falls 20% or more from its peak, then we are in a bear market. Bear Markets still very much exist as they happen around every 5 years. The average bear-market decline is about 33%. Before this bear market we are in currently, we had not been in one for 11 years. Fear not as you have to remember that the market can be miserable at times, but its long-term trend is always to the up and right. Jen wants you to INVEST, choose diversified index funds, and don’t just look at your investments.

What’s happening with home prices?

We don’t do fear tactic headlines but this CNBC article might scare you off a bit. Everything you need to know about home prices and why the prices are not dropping low despite the recession. 

What Jen + Jill have to say:

Jill is sorry to say but a housing crash isn’t coming. It’s changed a lot in 3 years as home prices in August were still 13.5% higher than August 2021 and roughly 40% higher than they were in 2019. Chances are the prices are not going to fall drastically anytime soon. The strong demand and tight supplies are supporting the high prices. You should put down as little as possible by looking at your personal finances, and calculating the cost-benefit analysis of buying points to reduce your interest rate instead of putting down a larger down payment and keep refinancing in your mind by planning to refinance in 2-3 years.

The Collapse of FTX: What Went Wrong with the Crypto Exchange?

It’s probably the biggest news to happen in 2022 within the finance world: the story of FTX. This article by Investopedia breaks down what went wrong with the crypto exchange.

What Jen + Jill have to say:

Crypto is not the enemy in this story but the mismanagement of the company. This is why Jen reminds us not to rely on the next new shiny thing as that is not your savior. Prioritizing your retirement investments should come first, remember not to view crypto as your enemy because sooner or later, elements of it would be helpful in the banking industry and due diligence is always worth the hassle and time. 

The hardest financial lesson we had to learn in 2022

As tough as it may sound, Jill found it difficult to realize that you can’t do everything all at once. You must prioritize what’s going to be the best and most responsible for you right now, keep reevaluating, and make significant shifts.

Jen also realized that she doesn’t want to be a real estate investor. Looking for a home was a hard season and an exhausting process.

Bill of The Week

Thank you Catherine for sharing your bill about $27k of student loans and your plan to pay off those student loans AND max out your 401(k) and Roth IRA, at 22 years old!!!

Thanks so Much for Listening!

Thanks so much for listening! Instead of sharing a win or a review, we want to reiterate that we are having a FREE challenge coming up. If you haven’t already, go to frugalfriendspodcast.com/makeover and sign up for this one-week challenge where there will be daily live lessons delivered in a pop-up Facebook community AND to your inbox. NO MATTER WHERE YOU ARE.

Congrats! Thanks for listening and if you want to check out our monthly challenge community head to frugalfriendspodcast.com/club to see what challenge we have coming up next.

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