Spending Diet 2022: Monthly Guide to Cutting Expenses

New year’s resolutions rarely last the entire year. Many of them are made in the heat of the moment. Others are just difficult to follow through on. Our proposal is that you set monthly goals, not annual ones. Here’s our list for each month in 2022.


January: Create a budget to pay off debt


January is the best time to create a budget to pay off debt. You just made it through the holidays and your tax return will come in soon. Take some time to calculate your expenses and come up with a reasonable plan to pay off your debt.


February: Increase retirement contributions


The IRS is increasing the maximum contribution limit for 401(k) plans to $20,500 in 2022. It was $19,500 last year. February is a good month to make the adjustment. Increase contributions to your retirement account even if you’re not at the maximum.


March: Eliminate one non-essential expense


This may fall in line with your religious beliefs since many faiths give something up for Lent. Our solution is more permanent. Eliminate a luxury expense and create a new habit. That could be something simple like getting rid of premium movie channels.


April: Put your tax return in the bank


Don’t spend your tax return on something frivolous. Don’t even use it to pay off debt. Put it into a savings account and forget you got it. Imagine how much you’ll put aside if you can do that for ten years in a row. It’s “extra money.” Treat it that way.


May: Plan a local summer vacation


Take a year off from traveling around the country and plan a local or staycation for your time off this summer. You don’t need to go far to disconnect from work. Try staying home, shutting off your phone, and taking day trips instead of flying someplace expensive.


June: Buy a smart thermostat


Summer is the time of year when electric bills skyrocket. Folks like to leave their AC running so they come home to a cool house. That’s not necessary. Buy a smart thermostat and set it to cool the place down when you’re home, not while you’re away.


July: Check your tax withholdings


You’re at the halfway mark for the year and it’s a good time to make sure enough money is being withheld from your paycheck to cover next year’s tax bill. Do a “dummy” tax return and see what you’d get back if the year ended on June 30th.

August: Start back-to-school shopping early


Early August is one of the best times to shop for back-to-school supplies. Start looking for sales and begin your shopping early. You’ll also avoid the big crowds if you’re still going to brick-and-mortar retail stores. Online stores typically run sales this time of year.


September: Add extra to your health savings account (HSA)


Contributions to your health savings account are tax deductible and September is a good time to add a little extra. You have eight months of expenses to evaluate, and four months left that you’ll need to cover. Don’t worry about having extra at the end of the year. It carries over.


October: Buy a smart thermostat (if you haven’t already)


Winter is coming. If you didn’t do this in June, do it now. Heating your home when nobody’s there is like throwing money into the fireplace. You might also want to check your windows and insulation situation. Investing in those is a cost-cutting move.


November: Start holiday shopping early


Are you sensing a theme here? Timing is everything when it comes to shopping. Get your holiday shopping started in November and look for bargains. Don’t wait until Black Friday or Cyber Monday. Many retailers start their holiday sales weeks before those days.


December: Harvest your tax losses


If you have an investment account, December is tax loss harvesting season. Sell some stocks that lost money this year and take the losses on your tax return in January. If you don’t have an investment account, use the holiday time off to open one.

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