New Year, New Resolutions!
The start of a new calendar year represents a fresh start for many people. Some commit to lose weight, get fit, become organized or spend more time with family and friends. One important resolution that often gets overlooked is a Financial Resolution.
Whether getting out of debt, saving for a down payment on a new home or investing in retirement is on your horizon, implement some of these simple strategies below to set your New Year’s Financial Resolution in action.
Review Your Finances
Take the time to do a thorough financial assessment. Commit to regularly reviewing your income, expense, debt and savings. The more often you review your budget, the easier it becomes.
Create a Monthly Budget
If you don’t know where your money is going, how are you going to prevent overspending? Remember to be realistic when determine your budget. Incorporate funding for emergencies and entertainment. Also, reevaluate as your budget or income adjusts. Implementing and consistently maintaining your budget will help you stay on the right financial path to achieving your goals.
Build an Emergency Fund
An emergency fund is strictly for emergencies like car repairs, unexpected medical expenses or job loss. A once-in-a-lifetime sale is not considered an emergency! Eastex suggests your emergency fund should contain three to six months’ worth of living expenses. If that seems out of reach, start your emergency fund in phases by saving $1,000 and growing your fund from there.
Done with Debt
If debt is consuming your thoughts, start the new year out right by putting debit in its place. Focus on the accounts that charge the highest interest rates and start paying down those balances. The faster you can wipe debt out, the more money you save on interest and fees. This means more cash for savings and meeting your financial resolutions.
Set Small Goals
Once you have established your goal, break it down into actions you can do today. If you want to save $100 this week, what can you do today to make that happen? Skip your morning coffee run to Starbucks, eat dinner at home, pack your lunch for work, etc. If you can spend $15 less per day on food, there is your $100 savings this week. Break things down into small goals, and focus on those actions.
Pay Yourself First
If your resolution is focused on saving or eliminating debt, the most important thing you can do is pay yourself first by taking money out of your paycheck as soon as you receive it. Put the money immediately into savings or make your debt payment. If you don’t do this immediately then something will always come up that feels more urgent and cause you to miss savings or paying down debt.
Automate, Automate, Automate
The most effective way to pay yourself first is to automate. Eastex can work with you to have your savings automatically deducted. For example, transfer $50 into your savings account every time you get paid. If you automate your financial goals, it easier to leave the automation in place rather than make choices that lead to failure.
Let us know how Eastex CU can help you meet your New Year’s Financial Resolutions. Visit our website at www.eastexcu.org or contact us at 866-445-9622.