The start of a new year is a wonderful time to make important changes in your financial life. Lucky for you, you don’t have to go it alone. SAFE Credit Union will walk you through some financial improvements you can make this year and continue to guide you every step of the way.
We’ve broken down some of the most popular financial resolutions into concrete steps and outlined the ways SAFE Credit Union can help you implement each change into your life.
Practice smart spending
Why it’s crucial: Creating and sticking to a monthly smart spending plan will force you to be accountable for your spending while giving you a clear idea of your financial reality.
In 3 steps:
- Track your spending over three months. Using a spreadsheet, a pen and paper, or SAFE’s Money Management tool , divide your expenses into categories, such as mortgage, groceries, etc. Use an average of the last three months to set a reasonable spending limit for each category.
- Going forward, track your spending and be sure to stick to your preset limits for each category.
- If your budget reveals your monthly income doesn’t cover your expenses, or you find you’re overspending in any area, look for ways to cut back.
How SAFE Credit Union can help: Stop in at any time at a SAFE branch to speak to a financial expert for help with managing your money. You can also learn more about managing your money at our Financial Fitness Academy, free and available to everyone.
Get out of debt
Why it’s crucial: Carrying long-term debt can mean paying exorbitant amounts of interest for years on end. It can also devastate your credit score.
In 3 steps:
- Make a complete list of all your outstanding debts in order from smallest balance to largest.
- Review your monthly budget and look for ways to cut back so you can pay more on your debt. Alternatively, you can look for ways to increase your monthly income with side hustles.
- There are two ways to tackle your debt: the avalanche or the snowball method. With the avalanche method, you pay off your largest credit card debt first, then apply those funds to your other cards. With the snowball method, you pay off your lowest-balance cards first, then apply those funds to your larger balances.
How SAFE Credit Union can help: If you’re carrying multiple high-interest rate debts, consider taking out a personal loan to simplify things. This way, you’ll only have one low-interest loan payment each month. Speak to a representative at SAFE Credit Union to discuss this option.
Why it’s crucial: According to the Federal Reserve, 40 percent of Americans can’t cover a $400 emergency expense. Living without a safety net means a relatively small, unexpected expense can throw off your finances and force you into debt. Aside for paying for emergencies, savings can help fund your long-term plans, goals and dreams.
In 3 steps:
- Review your monthly budget to identify your biggest spending traps. Then, find ways to cut back, such as shopping with cash only, cancelling subscriptions you never use, or initiating a “financial fast” one weekend each month, in which you spend no money.
- Use all money saved to open an emergency fund and a long-term savings fund at SAFE Credit Union. It’s best to focus primarily on your emergency fund until you have 3-6 months’ worth of living expenses stashed away. SAFE offers you-name-it savings accounts so you can save for a specific purpose.
- Set up an automatic monthly transfer from your SAFE Credit Union checking account to your SAFE Credit Union savings accounts so you never forget to feed your savings. Also, check out SAFE’s Perfect Cents Checking® that can put your savings on automatic.
How SAFE Credit Union can help: Our savings accounts offer your money an excellent opportunity for growth. You can open an account with an initial deposit as low as $5.
Maximize your retirement contributions
Why it’s crucial: Many workplaces offer to match 401(k) contributions. These contributions aren’t taxed and they come off your paycheck, which is taxed, making participation an excellent decision. Your 401(k) withdrawals will be taxed in the future, but the compound interest your fund will accumulate until then will more than offset this cost.
In 3 steps:
- Speak to an HR representative at your workplace to find out about your current 401(k) contributions.
- Identify how to best maximize your 401(k) contributions going forward.
- If you have any other retirement funds, such as an IRA or a Roth IRA, also review your contributions to determine if you are making the maximum funding allowed.
How SAFE Credit Union can help: Our financial experts will be happy to help you determine the best course of action for planning your retirement.
Let SAFE Credit Union help you meet your money goals this year. Together, we can make this the year you take control of your finances and start working towards a financially comfortable future.
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