The 3 Biggest Expenses To Cut Down In 2022 And How To Replace Them With Better Money Choices

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It's a new year, and you may want to cut down on some of your biggest expenses from 2021 in 2022. We'll talk about three of the most common large expenses below and how to go about replacing them with better money choices.

1. Credit Card Debt

Many individuals have to deal with credit card debt. If you're one of them, you may find that it's your overall largest expense. You might have to pay the balance on one or more cards, but there's also the interest to think about that keeps on accumulating.

If 2022 is the year you want to reduce your credit card debt as quickly as possible, you should explore a few methods. You might decide to get a personal loan to consolidate debt. You can usually find a single low-interest loan that you can then utilize to pay off all your credit card balances. The main benefits are that you'll have only a single monthly bill to pay and that you can typically secure a lower interest rate on your debt.

Plus, you will probably find it easier to keep track of a single debt payment than several of them, making it less likely to miss a payment.

2. Banks

Some people look at banks and feel like they are pretty interchangeable but that's not the case. However, you'll never really know unless you scrutinize each bank and its policies.

Some banks charge fees for money transfers, ATM withdrawals, and other transactions. It might be only a couple of dollars here or there, but think about how that can add up as the year progresses.

If you're trying to cut your costs and make smarter choices, you'll want to avoid banks with overdraft charges, monthly maintenance fees, and wire transfer fees. If your bank still charges you for those, 2022 can be the year when you look into some different options.

The ideal bank is one that has policies like overdraft forgiveness, has plenty of ATMs nationwide, and has no monthly account maintenance fees. Don't accept it as a foregone conclusion that they all do that. You can often find a bank with policies that are more user-friendly (and less costly) if you shop around a little.

3. Homeowner's Insurance

Homeowners need insurance. It provides them with a handy financial safety net if something unexpected occurs. It can protect your equity, shield you from lawsuits, and give you comprehensive coverage.

Some policies cost more than others, though, and it's never a bad idea to compare yours going into a new year. There are digital marketplaces where you can look at quotes from different companies. It's possible that you can find a better rate now than what you've been paying.

Switching home insurance coverage can potentially save you hundreds of dollars. That's not an insignificant amount. A simple policy switch might put more money back in your wallet that you can allocate toward other things you need.

These Are All Easy Changes to Make

The above changes should be fairly easy to make. Exploring a personal loan instead of paying off individual credit card bills, switching banks, and changing from one homeowner's insurance policy to another are all tasks you might accomplish in a single weekend.

Once you've done those things, you'll know you're starting off 2022 on a positive note. You should appreciate the savings, and you'll doubtless find plenty to do with the excess cash.