Credello: Timeless Money Lessons We Learned From 2021

2021 was another wild financial year. We saw the rise of “meme” stocks that exposed the power of online communities in manipulating financial outcomes. Inflation hit the headlines — and consumer’s wallets — hard toward the end of the year with surging prices everywhere from the gas pump to the grocery store. The student loan debt situation has also continued to grow with over 43 million Americans carrying this type of debt. Many people are facing the question of should they pay off student loans or invest, and the answer isn’t as straightforward as you think.  And a wave of employee resignations swept through industries, showing us all that the grass might just be greener on the other side.  
In other words, there was a lot of financial upheaval in 2021, but that means there is more to be learned, then. Here are four timeless money lessons we learned from 2021.  
Lesson #1: The price of stocks is no longer only driven by business performance
What do GameStop, AMC, and Blackberry have in common? They were all the target of “meme stock” madness in early 2021. Retail investors, brought together by sites like Reddit, banded together to drive prices up with exceptionally high trading volume. Then, some of these investors cashed out while others rode the wave as the stocks plummeted back to their pre-mania lows.  
We learned a few things, but most importantly, stocks are no longer driven by metrics and business performance. Several strangers on the internet can band together to make abrupt changes in stock price, even causing it to skyrocket hundreds of dollars in a single day.  
The key takeaway for investors? Put the bulk of your investments in tried-and-true options like ETFs or mutual funds. Limit your exposure to the meme stock mania and only play with what you’re ready and willing to lose. This kind of speculative investing is a game(stop) after all.  
Lesson #2: The way to combat economy-wide inflation is to make changes on the home front
In late 2021, prices surged everywhere. You can thank the pandemic lockdowns, ongoing supply chain issues, and higher consumer demand. Unfortunately, it doesn’t look like inflation will stop anytime soon. But there are practical ways for consumers to adapt to ongoing inflation.  
While inflation happens on an economic level, the most effective place to implement changes is at home. That means looking more closely at what you’re buying in the grocery store, monitoring transportation costs, and maybe even looking to take on a side hustle or part-time job.  
From an investment standpoint, periods of economic inflation are great for investing in commodities, consumer staples stocks, and real estate.  
Lesson #3: Employers need to quantify the cost of time and freedom
2021 saw a surge of people leaving their jobs at levels never seen before. Dubbed “the Great Resignation,” employees decided the office life might be brighter in the next company’s cubicles. Employees left jobs for plenty of non-financial reasons, like burnout, higher workloads due to smaller teams after pandemic layoffs, and a severely imbalanced work/life balance.  
The money lesson we learned is that employers need to quantify the non-monetary perks of their positions to attract and retain employees. There is undoubtedly financial benefit from only needing to work 40 hours a week instead of 50-60 and picking up that side hustle instead. Lower stress can also translate to fewer medical bills and sick days. We can only hope that the Great Resignation serves as a reality check for employees and employers that more money doesn’t necessarily mean more happiness and job satisfaction.  
Lesson #4: Watching people grapple with unmanageable debt can sure be entertaining  
Squid Game caught the eye of pretty much everyone, skyrocketing to Netflix’s number one spot with a mind-boggling 571,760,000 hours viewed during a single week from Sept. 27-Oct. 3, 2021. It turns out that buried beneath children’s games and violence, Squid Game taught us lessons about debt.  
We learned that there’s rarely a quick fix for a huge debt burden. Some people decide to risk their lives for a huge cash outlay, while others may spend years or decades making regular debt payments the old-fashioned way. But the key financial takeaway for everyone should be the importance of not taking on unnecessary debt and how an emergency fund can help combat it.  
As we look to 2022, will these money lessons leave us better prepared? We can only hope that people reflect on these four money lessons and use them to make smarter money decisions in the coming year. Otherwise, you could find yourself with a starring role in season two of Squid Games.  
Source: Credello