New Year, New Financial Resolutions
Whether it’s putting more of it in your pocket or spending it less frivolously, your New Year’s resolutions are going to require some cash. And we get it, taking on your finances isn’t as exciting as being able to fit into your jeans from high school. But with a little discipline and planning – including planning for some setbacks along the way – we can help make your financial goals a reality in the New Year and beyond!
Think you’re the only one set on getting money smart in 2014? Think again. Here are some of the most common resolutions that your fellow Credit Union members are making in the New Year as well as the steps that you and the Credit Union can take to help reach them.
Financial resolution: “I want to start saving for a home, rainy day or (insert other big ticket item here).”
Saving is one of those things that’s easier said than done. But with a little preparation, it’s easy to get started.
1) How do I get started? Set saving goals. Short-term goals are easy. Want to buy the latest i-“something”? Find out how much it costs and decide when you want to purchase it. Then, divide the price by the number of pay periods between now and your intended purchase date and that’s how much you need to save from each paycheck. If you want to buy a house, figure out how much you will need as a down payment and use that same pay period math to figure out how much to set aside. Longer term goals, such as retirement, will take a lot more planning.
2) How can BCU help?
a. Short term goals: First, watch this quick video on building an emergency fund.
Need to know where to stash all that cash you’ll be saving? Our Rainy Day Savings™ account can be the perfect place.
We’re so supportive of your saving goal that we’ll pay you to keep at it with a great interest rate that will increase after one year of savings.
Think of it as our little way of saying, “Great job, Super Saver!”
b. Long term goals: Looking at bigger goals with longer time horizons? When it comes to retirement planning and college savings, it’s time to bring in the experts. Lucky for you, the Credit Union has the experts and they’re eager to help. Contact our Investment Advisors team to get started.
Financial resolution: “I want to be smarter with my spending.”
It’s not a fun resolution to start, but you’ll need a budget. Ah, the dreaded B word! But just because you’re not one for budgets doesn’t mean there isn’t any hope for your finances. Consider taking a more flexible approach to managing your money via a spending plan.
1) How do I get started? Set up a spending plan.
a. Step 1) Calculate your spending money: Take your monthly income after taxes and subtract your fixed expenses like rent/mortgage, insurance and recurring monthly bills.
b. Step 2) Think ahead and save: Set aside a certain amount of your spending money for future expenses (see saving goals above) like new tires, paying off debt or maybe even taking a Caribbean vacation. Deduct that amount from your spending money.
c. Step 3) Make a list: Similar to a shopping list, this list will include your needs and wants. Once all of your needs and wants are listed, go through them to prioritize and recognize the difference between the two categories:Do you really need those new shoes? Make sure to use the spending money only on the needs and wants that are really important to you. There are no wrong or right answers here (hey, maybe you really do need those shoes). However your list stacks up, just make sure to keep to what you have available for spending money (see Step 1).
d. Step 4) Keep track: Setting a spending plan isn’t a one-time thing. Keep track of your purchases to make sure that you are staying within your spending limit and make adjustments to your plan as necessary.
2) How can BCU help?
a. Sign up for Pilot ™, the Credit Union’s online budgeting and planning tool. It will help you keep track of where your money is going and alert you when you get off track. And it’s free, so no need to put it on the spending list!
b. Open up a Rainy Day Savings™ account to save for future expenses.
c. Make your money work for you. Earn interest and save on checking fees (one more thing to take off your spending list!) by signing up for Power Interest Checking™ at the Credit Union.
d. Want to dig into where your money is going? Check out OnTrack™ – a budgeting tool from BALANCESM – offered free to Credit Union members!
Financial resolution: “I want to pay off my debt.”
Debt is expensive. From interest to fees and penalties for late payments, the cost of carrying debt really adds up! Even thinking about the monthly payments can be tough, so you may be tempted to ignore the total costs, but don’t. Simply looking at how much money you spend each month on your debt will show you that getting rid of debt is one of the fastest ways to free up cash. Just think of all the great things you could be doing with it (Like a cruise! See the savings goals above) if you didn’t have to put all that money toward debt payments.
1) How do I get started?
a. Pull your credit report at annualcreditreport.com to determine your starting point. (Yes, really, use this one, not the one you see on TV!)
b. Get organized by noting all of your due dates along with minimum payment requirements.
c. Review your budget to see if there is any extra money to send to accelerate payments on your credit cards. Don’t have a budget? Setting one up is easy. Check out this video:Creating a Budget in 4 Simple Steps.) Why accelerate? Thanks to compounded interest, extra payments now mean big savings later. Your future self (on that awesome cruise you’ll be enjoying) will thank you!
2) How can BCU help:
a. Calculate how much you can save by consolidating your credit card balances with the Credit Union’s balance transfer offers. Getting all of your debt in one place will make it easier to manage and who knows, it may even help cut down your monthly payments. Contact our Lending Department at 800-388-7000 to discuss the best option for you.
b. Get educated. Watch this video:The Facts on Deleting Credit Card Debt and learn how to put yourself in the debt deletion driver’s seat.
c. Need a more personalized solution? Try the BALANCESM Financial Fitness Program. This free service will help you devise a custom debt management plan to help consolidate your credit card payments, lower payment amounts and even reduce or eliminate interest and fees.
Our New Year’s resolution is to help you reach yours! Whatever your goals may be, we want to help you get there. For more information on how we can help, visit Life. Money. You.™ , the Credit Union’s financial education resource.
Rainy Day Savings™, Power Interest Checking™, Pilot™, and Life. Money. You.™ are trademarks of BCU.
BALANCE℠ is a servicemark of Consumer Credit Counseling Service of San Francisco.