Financial Challenges: Could 2022 Be Your Worst Year Ever?

When COVID-19 hit us all back in the beginning of 2020, we were shocked, surprised, endangered, and depressed. It seemed like the world was ending or at least that it might be as we stopped being the people we were and fear took over. If you were lucky enough not to actually get sick, you still probably stopped working, stayed at home, and hunkered down waiting to find out when life would resume to being normal again. We are still waiting for it even though over a year and a half has gone by. In our lifetime, this is the biggest disruption we’ve ever experienced. But with the financial challenges facing us in 2022, could it become the worst year ever?

Man with empty pockets representing how 2022 could be the worst year ever financially

What Happened?

First of all, I do not want to minimize the fact that 700,000 Americans have died during this pandemic and millions more around the world. That is the definition of a disaster. Millions more were and are ill and who knows the ultimate long-term effect these health problems will wreak in the end. No one does.

But if the pandemic was responsible for you losing your job, or it caused you to be unable to pay rent or your mortgage, or afford to feed your family or get childcare in 2020 and 2021, you suffered badly no doubt about it. Just the food issue alone was and is a huge disaster.

Those among us who were in that position, or still are, and those in lower income jobs are worse off financially speaking. That meant they didn’t have resources to stave off a blow like this to their financial lives and that’s the main reason the government stepped in with financial aid and that communities where they lived did the same thing.

Generosity during a disaster is an amazing thing to see and experience, and this was a clear example of it. But getting aid, your job back, going back out again, and enjoying your life doesn’t mean the Garden of Eden has returned to us. In fact, that garden may have many weeds growing in it and you’re about to experience them in 2022.

Why 2022 May Be Your Worst Year Ever Financially

1. Supply chain issues

Raw material shortages, labor shortfalls, port closures, rising fuel costs, and other forces will continue to exert enormous pressures on the global supply chain in 2022. Getting goods and services delivered better and faster at reasonably normal cost is almost a pipedream at this point. This means that the inflation of 2021 that is about 6% over last year will be at least that or higher in 2022.

2. Labor shortages

Business will continue to face labor shortages despite the return to work push. The reason is the drive to get higher “livable” wages and that means business will have to pay more for labor. That’s already happening as wages are going up now and that will go even higher in 2022. Who do you think will pay for that?

If you said you in the form of higher prices for—wait for it—everything, you would be right. Your pay increase, if your get one, will more than likely be wiped out by inflation and could be putting you into the negatives numbers financially speaking.

3. Environmental impact

The uncertainty of the environmental impact will affect your wallet. It may have finally actually happened. It seems to be a “come to Jesus” moment with the environment. Let’s hope that is true, but it also comes with a huge price tag and the first payment is coming due in 2022!

If we are to meet the standards to save our planet and comply with the measures to protect the environment, 2022 is just the first year for increases in the cost of producing safer products. The wheels are turning faster now than ever before to do it. Some business will make it a profit center only and you will pay for it beginning in 2022.

4. Oil

Speaking of environmental issues, oil and gas prices right now are going through the roof and these will be the good old days by mid-2022.

You’re back on the road again and that means gas. The weather is becoming more extreme and that means fuel for heating will be driven up. Car prices are skyrocketing due to limited production, high demand, and because you want them and will pay more for them—environmentally safer or not.

5. Spending is in, saving is out

I don’t care if you didn’t spend because you didn’t have the money or whether you didn’t spend because there was so little to spend it on—no movies, ballgames, restaurant dining, vacations etc.—2020 and 2021 may have actually driven up your bank accounts in that way. The gloves are off now and spending is the new orange! Or something like that.

Spending more, saving less, and being out of control in 2022 may be good for the economy but not for you.

6. Retirement planning may be on a back burner – wrong!

2020 and 2021 hit retirement savings plans very hard. Raiding the accounts became common (no emergency fund as a safety net?). No or reduced income stopped many from doing any saving at all and getting back to that routine may be near the bottom of your list now. Please don’t let that happen or it may be bad now and even worse when you actually retire.

Your money grows exponentially over time and a year or two lost can stall and kill your growth rate. If saving for retirement is stalled or abandoned, you’ll fall into the trap of thinking that you don’t have to resume saving now, but you do!

Be Smarter About Everything

You know I love saying I am a smart shopper. If I am, you can be too. It doesn’t require nearly as much intelligence as it does dedication. Wanting to save money is the way to build wealth. Earning more isn’t the only way because earning more usually comes with spending more.

Isn’t it kind of funny that you earned $40,000 a few years ago but you seemed to spend just a bit more than that and found debt when you did? Then when you made it to $50,000 a year or more did the debt go away? Probably not. That’s because you always seem to spend just beyond your means no matter what. If you can’t control spending and increase savings, you can’t increase wealth.

Educate yourself and your family in just how to do it. Read more and learn more and never stop because the test for you is 2022! It doesn’t have to be your worst year ever.

Final Thoughts

After experiencing an incredibly challenging two years, I think we can let go of any expectation that the world landscape will ever return to “normal”. By that, I mean that extreme uncertainty on both the demand and the supply sides will continue for the foreseeable future, certainly in 2022.

If the past two years have taught us anything, it’s that we need to brace ourselves for the unexpected. Prepare yourself for an increasingly uncertain future. Prepare mentally and financially.

We will never have the capability to sense a global pandemic, or an event like the Suez Canal blockage, in advance. But whatever happens in 2022 and beyond, you must actually have a plan to deal with it and its consequences.

Do I expect you to actually think about a canal blockage? No. But asking yourself the “what if” questions about your personal finances are questions you need to deal with now before the next global issues hit home. Don’t let 2022 become your worst year ever.

Have you begun your planning for post-pandemic life in 2022? What will you do differently in 2022 to make sure you are ready for anything financially speaking?


  1. Its very odd how different people’s experiences have been. As a retired couple our net worth has soared over 2020 and 2021. We’ve taken road trips all over the country without interruption. Our prime hobbies of tennis, fishing, hiking, running and pickleball never required masking and never were restricted. We’ve experienced no shortages of anything from toilet paper to beef. We even bought and sold a couple of cars during this period without any problems. We know of a handful of friends who got ill but generally not very ill. Nobody close to us died. The number of cases is almost back to flu like levels here. Yet on the other hand it has been an actual nightmare for many people less fortunate.

    1. It’s great how fortunate you and your wife have been over the last two years and yet you are so right when you say many people have suffered or worse. I think that people who are retired like us are fortunate because we did not have a dramatic loss of income. We have already adjusted to a lifestyle with Social Security and retirement income and that didn’t change. In fact, many retirees received stimulus money that almost seemed like a gift from the government.

      In the NYC metro area where we live, COVID was severe and restrictions were everywhere. Shortages of products were also part of life for a good period of time. But we made it through unscathed personally and amongst my family and friends. Still it was a shock and does make us wonder what will happen next. Let’s hope that the next 100 years will be a much healthier environment to live in. Thanks for your comments, Steveark.

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