December is winding down, and that means it’s time to think about resolutions for the upcoming year. After a year like 2020, financial resolutions are probably top of mind. The beginning of the year is the prime time to focus on what’s going on with your money. With the right plan in place, you can stick to your financial resolutions and end the coming year in a better place than you started it. Although many of us make our New Year’s resolutions such as lose weight or learn a new hobby, it is important that we also remember to keep our financial posture fit, as well. The start of the year offers the opportunity to focus on what’s going on with your money. By creating a strong financial plan and sticking to it, you will be more likely to fulfill your other resolutions, such as traveling more (we hope), paying off your credit or student debt, purchasing a new car, or even a house! Being financially fit is a strong component to making other parts of your life easier, so don’t forget to make financial New Year’s resolutions.
Here are 10 financial resolutions that everyone should have on their list:
1. Save More
This is a New Year’s resolution on everyone’s list every year. Whether it is increasing your retirement contributions, placing your money into an account with higher dividend rates, cutting back on spending, using your credit card less, or winning the lottery, in order to make this resolution successful in the new year, you need to figure out what the best way to save for YOU is. Everyone is different and everyone’s financial situation is different. Take a moment to assess your financial situation. There are numerous resources available out there to help you save better. Click here to learn 54 ways to save money.
2. Create a Budget and Stick to it
Tracking your spending is a useful tool to help you understand where your money goes. Budgets help set parameters for what you can afford to spend and help you identify areas where you can cut back. Start budgeting now with these personal finance apps:
- UKRFCU App – Money Management (within your Online Banking) – Money Management is a service that provides a visualization of spending over time divided into categories. See all your accounts, including those with other financial institutions. Bubbles help you understand the relative health of your budgets instantly. Every transaction is automatically categorized so you can spend smarter. For more information, click here.
- Wally – Wally helps you compare your income to your expenses, understand where your money goes and set and achieve goals. Wally lets you keep track of the details as you spend money: where, when, what, why, & how much.
- Mint – Bring together all of your accounts, bills, and more, so you can conveniently manage your finances from one dashboard. See all of your bills and money at a glance. Create budgets easily with tips tailored to you.
- PocketGuard – Link your credit cards, checking and savings accounts, investments, and loans, to see all your finances in one place. Transactions are updated and categorized as they happen, to help you understand where your money goes and discover opportunities to save.
- Checkbook – An easy and quick way to manage your daily finances, Checkbook keeps track of your credit card charges, cash expenditures, and more that can replace your paper checkbook. Create multiple accounts, save recurring transactions, transfer funds, view reports & graphs, and export data.
3. Pay off your Debt
Whether you are paying off your student loans, credit cards, or other debt, you are not alone. If you have student loans, consider refinancing them. If you have credit card debt, consider consolidating it with a better balance transfer credit card. We offer credit cards with lower rates, limited fees, and more rewards.
Remember that it is not wise to pay only the minimum amount due. Paying off the balance in full every month or paying more than the minimum amount can help establish a good credit rating. Read more about paying off credit cards by clicking here.
Read more about Debt Consolidation Options and the pros and cons of it. This option may work for some people to help pay off debt. Debt consolidation loans are typically used for unsecured debts, for example, personal loans, credit cards, and student loans. Instead of dealing with multiple bills, you have the ability to manage one consolidated bill.
4. Boost Retirement Contribution
Although retirement might be 30, 20, or even 5 years away from today, challenge yourself and increase your contribution to your 401(k). It is also a smart move to contribute enough to your workplace plan to secure your employer’s match if offered. As many say, “forgoing an employer match is like leaving free money on the table.” Even though it is a small amount that gets placed into your 401(k), you will be glad you did it come retirement. Planning for the future is never too early. Click here for free resources that can help you with your retirement plan.
5. Improve your Credit Score
If your credit score is not 850, don’t worry. Make it a goal to raise it in the upcoming year. There are several ways to improve your credit score that include paying your bills on time and in full, paying off debt, limiting how many new accounts you open, and cutting back on spending. Click here to read about easy tips to help raise your credit score.
6. Learn about Personal Finance
Whether you’re a financial expert or have just begun to learn about personal finance, the start of the new year is the time to start managing your money better by educating yourself. Become a personal finance guru by:
- Reading a personal finance book. There are hundreds of thousands of books about personal finance ranging from budgeting, spending, saving, and everything in between. Click here to learn about the best personal finance books of 2020 and choose one that is best for you. Some include Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!, The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich, and How to Retire Happy, Wild, and Free: Retirement Wisdom That You Won’t Get from Your Financial Advisor.
- Listening to a personal finance podcast. If you prefer listening instead of reading, listen to what these finance experts have to say about money goals, money management, and more. Click here to learn about the best personal finance podcasts of 2020 and choose one that is best for you.
- Reading personal finance resources and blogs. Everything and anything that revolves around personal finance can be found in one of these blogs by clicking here. Choose one that is best for you.
- Attending personal finance or other UKRFCU educational seminar. Our goal is to provide you with more educational resources in addition to higher savings rates and lower loan rates. UKRFCU committed itself to develop a series of member education sessions. Stay tuned for upcoming events and choose one that is best for you.
7. Evaluate Needs v. Wants
Needs v. wants is something we learned about in Economics class. Do you really need something or is it simply a want? If you can answer the question with “I don’t need it to survive,” then it is a want. Being able to distinguish between needs and wants is crucial for putting a budget to help meet your New Year’s resolutions and financial goals. Some small things you can do without even realizing it is:
- Get healthy without joining a gym. Try doing exercise videos online, jogging in the park, or taking a walk around the block. Click here to see the best workout apps.
- Pack a lunch. According to the Bureau of Labor Statistics, the average household spends approximately $3,365 on food outside of the home each year, which is $280 per month. Although you are craving the yummy food near your work or college, it adds up. Save money by cooking at home and packing a lunch.
- Cancel automatic subscriptions and memberships. You don’t need a subscription to Netflix, Hulu, HBO Now, Disney+, and Amazon Prime Video. If you really need a video streaming service, pick one. If can survive without it, watch TV cable instead.
8. Start Investing
Have you always wanted to invest but never knew where to start? No worries. Everything you need to know about investing can be found by clicking here. You’ll learn about the types of investment products if you’re heading in the right direction, how markets work, and more information about retirement plans.
Members can also begin investing in property with UKRFCU’s Commercial loans. You can count on us for competitive rates and outstanding service. Commercial Loan options include:
- 1 to 4 residential units
- 1 to 12 unit apartment buildings
- Retail space
- Mixed-use properties
- Office space
UKRFCU provides financing for the purchase or refinances of properties in eastern Pennsylvania, New Jersey, Delaware, Maryland, southern New York, and Washington, D.C. Your success is our bottom line. To learn more about UKRFCU Commercial Loans, click here.
Invest at UKRFCU with our regular Share Certificates or IRA Share Certificates, and Money Market accounts to accomplish your savings goals faster. You can start saving today and enjoy it later.
9. Plan for the Unexpected
No matter how well you plan in advance or how great things are going, bad things can happen. Set up an emergency fund for those events that can, but hopefully won’t happen. Financial planners recommend that emergency funds should typically have three to six months of living expenses. A few important reasons why you should have an emergency fund is in case of job loss, medical bills, and home or auto repairs. Plan for the unexpected by clicking here.
10. Stay “Cyber” Smart
We constantly hear and read about password security, public WiFi, checking grammar, not clicking on links you do not trust, phishing emails, trusting your intuition, ATM tampering, spoofed phone calls, SMShing, vishing, etc. The list goes on and on. Unfortunately, it’s a world we live in, and guarding our finances is something we must do every day. Be vigilant, always, and remember to check out our Cyber Security blog for useful tips and information.