Attainable Financial New Year's Resolutions
Published November 6, 2023
As we enter a new year, you have probably debated improving your health, overcoming an obstacle, or kicking a habit – but have you thought about your financial fitness?
Much like a healthier lifestyle, financial fitness does not come overnight. Whether your resolution is to save more money or pay off debts, here are some attainable ways to jump start your financial well-being this new year.
- Stick to a Budget
Saving money can be a challenge for even the most seasoned savers, but it does not have to be. One of the best ways to save money is by creating a budget. Unfortunately, that is the only easy part. After creating a budget, you must stay true to your limits.
For an organized budget, divide your spending into categories – needs, wants, and savings.
- Needs: Housing, utilities, groceries, gas, childcare, credit card or car payments.
- Wants: Clothing, dining out, subscriptions (Netflix, Hulu, Spotify, etc.), and gym memberships.
- Savings: An emergency fund, 401k contributions, investments, and nest eggs.
Sticking to your budget will make your finances happier and healthier by planning ahead. Creative ways to help your budget include carpooling, meal planning, no-spend days.
- Reach Savings Goals
Many people hope to increase their savings in the new year. While this is a great goal, without clear steps, it can be easy to lose sight of your goal along the way. The first step to saving money is to know where your money is going.
Taking a look at your previous transactions can give you an idea of what you frequently spend (or overspend) on. Although it may be uncomfortable, this is the best way to understand your spending habits. Spend some time evaluating where you want your money to go and create savings goals. Examples of saving goals:
- Down payment on a home
- Vacation
- Emergency fund
- Gifts
- Concert tickets
- New appliances
Luckily, West Michigan Credit Union has a new program, Round Up, to help kick start and maintain your savings goals. Round Up is a feature that can be activated on your checking account to round up daily transactions into one of our specialty savings accounts.
By using Round Up, you will be actively contributing to your savings, without feeling overwhelmed by the daunting task. If you had an average of $3 in change roundups every day for an entire year, you would have saved up over $1,000 without thinking twice.
Some of our specialty savings accounts include Christmas Club, Nest Egg, or our Money Market Savings Accounts. To activate the Round Up feature on your account, contact a member service representative at 1(800) 442-4576.
Some other ways to increase your savings are:
- Restrict online shopping
- Cancel unnecessary subscriptions
- Track spending
- Map out major purchases
- Redeem extra coins for cash
- Monitor student loans
- Refinance High Interest Loans
One of the best ways to save money is by refinancing your loans. Refinancing a loan can have many beneficial aspects. Some ways that refinancing your loan can help you in the long run are by reducing your interest rate, making your monthly payment more manageable, and shortening your loan term.
Individuals may also choose to refinance their loans due to an increased credit score or if they are unhappy with their current lender. While all of these elements may not be true for all individuals, there are plenty of reasons to look into a refinance on current loan.
- Improve Your Credit Score
The road to a great credit score can be long and testing without a direct solution. Credit scores are calculated from a multitude of factors including number of accounts, payment history, debt ratio, credit limits and usage, how long you’ve had credit and inquiries. Most of these factors can’t be altered by making a singular change.
Of the factors listed above, there are a few ways to better your credit score by taking action. Credit scores are heavily influenced by payment history, considering if collections have ever been involved. To boost your credit, make your payments on time and monitor your accounts to ensure payment has been withdrawn to avoid collections.
Credit limits and usage also play a large role in your credit score. To increase your score, keep your credit usage below 30% across all credit taken out in your name. Pay off small purchases quickly and monitor your accounts to be fully aware of your spending.
Avoid reckless inquiries into your credit, maintain a stable amount of accounts, and continue using your credit to increase your score overtime. Remember that credit score providers factor these elements slightly different, resulting in varying scores.
- Take Advantage of Discounts
Members with a Simply Better Checking Account have access to tons of discounts on eclubonline.net. These discounts vary across health, retail and shopping rewards, travel and leisure activities, and additional security options. If you have a Simply Better Checking Account, you must register for these additional savings.
- Pay Bills on Time
WMCU can establish automatic funds transfers (AFTs) to assist with making transfers automatically, allowing you to set it and forget it. WMCU also offers Bill Pay to make secure payments to other establishments.
By paying your bills and necessities at the beginning of the month, you will never have to worry about “making it by” or having late payments. These features give you a complete view of where your money is being spent and what you have left to boost your savings.
- Build a Retirement Fund
It is never too early to start saving for your retirement, even when it seems like it is too far in your future to even consider. Realistically, retirement may be far down the line for you, but having to suddenly start saving for your retirement can add more stress and anxiety than if you make it a normal part of your savings routine from an early age. If your employer offers a 401k matching program, take advantage of the free money. No really, it’s free money.
It is important to understand your retirement savings options, and it is best to speak with a financial advisor or a human resources representative to fully understand any company initiatives. It is best to start your retirement savings now because as you can see, “a year can go by in a blink of an eye”.
Start the new year off right by setting small, manageable goals to get one step closer to financial freedom!
For more information about the products and services we offer, contact us at 1(800) 442-4576.
This was originally published in 2021 and has been updated by West Michigan Credit Union to maintain accuracy.
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