Financial lessons to learn from 2022

The year 2022 was an eventful year for all of us. We have witnessed political tensions, crypto currency downfall, layoffs, rising interest rates, inflation, and the impending recession. Even the situations that are happening globally also impacted our nation in several ways. The year that went by taught a lot in terms of finances. So, here’s a small recap of financial & investment lessons we got to learn from 2022.

1. Emergency will not ask for your permission

The year 2022 saw many popular companies laying off workers and employees for cost cutting. This brings a fact to the fore that emergencies are inevitable. Job loss, medical contingency, etc., can arise anytime and one needs to be prepared for such situations financially. The best you can do is start building an emergency fund to avoid financial stress.

2. There is no such thing as best or worst asset

Every asset performs based on the market condition. At one point, gold’s value may increase, and real estate market may underperform. So, this does not mean that you shouldn’t invest in an asset because it is not performing well currently. Diversification and patience are key to investments.

3. Be comfortable with The Uncomfortable

When you are learning something new that is out of your comfort zone, it is obvious to feel underconfident about it. The same goes with investments as there are risks involved due to market volatility. But if you are ready to face investment risks with proper planning and learning, gradually, you can get comfortable with it.

4. Invest & Review

To tackle the growing inflation in India, starting investment is key. The cost of essential items like food, clothing, utilities, education is growing day-by-day, and this is the reason why you should invest. You may select the assets based on your risk profile & financial goals. At the same time, having a periodic review of investment is also necessary so that if there is a need, you can reallocate assets in your portfolio. 

5. Increasing interest rates

In the year 2022, the Reserve Bank of India (RBI) increased the repo rate, which in turn also increased the interest rates making loans costlier for borrowers. And further increasing the loan EMIs for customers. The increased interest rates taught us about prepayment of loans partially or fully if there are surplus funds. This helps to reduce the interest burden to some extent.

Key Takeaways:

• Even though you have planned your personal finances, there are times when you may make mistakes

• To avoid such mistakes in the future, it is necessary that you review your personal financial planning periodically

• 2022 was a difficult year for the Indian economy, but the money management lessons it gave us will help to reshape our finances in the new year 2023