Get Fiscally Fit in 2019

Get Fiscally Fit in 2019

As 2018 draws to a close, you may be reflecting on the past year and looking for ways to improve your financial standing. Whether you want to set a savings goal, reduce debt or fund home improvement projects, your credit union is ready to help.

Because credit unions are not-for-profit financial cooperatives, members always get a better deal. Unlike for-profit financial institutions that must pay stockholders, credit unions return benefits back to their members in the form of higher savings rates and lower loan rates.

Check out the following tips and recommendations to improve your financial fitness in 2019. If you have questions or would like account information, your credit union is the perfect place to start.

Create an emergency fund
No one knows what the future holds. Experts recommend having enough money to cover between three to six – or even nine months’ worth of expenses in the event of a personal financial emergency, such as the loss of a job, a debilitating illness, accident, or a major expense. This will allow you to cover big expenses in a crisis so that you don’t have to pile up debt with a large credit card balance or by taking out a high-interest loan.

Setting up your emergency fund takes time and patience, but the benefits far outweigh the effort. Approach this effort by putting together a savings plan:

  • The first step is to determine how much you spend each month. Housing, transportation, and food will likely take the lion’s share of your income.
  • Once you know your total expenses for each month, multiply that number by three. Reaching that number will be your initial goal. Then, it’s time to start saving money.
  • Downgrading your cell phone service, skipping that two-week vacation, cutting down on dining out, and saving your next raise or bonus are all simple methods of adding to your emergency fund.
  • The key to continued growth is to add to the emergency fund at regular intervals. Ideally, you should treat emergency savings like any other recurring bill that you must pay each month. Dedicate the appropriate amount from your paycheck and set it aside.
  • Set your savings to auto-withdrawal online each paycheck. That way you won’t be tempted to spend it.

Even if you don't have the dedication to stick to a savings program, you can start simply. Save your change in a jar, make meals at home and bring lunches to work, skip the latte, and put new-found money from paying off a big debt, such as a personal loan or an automobile, into your fund. View your emergency fund like an insurance policy. Once you have it, safeguard it. If you ever need the money, you'll be glad you did.

Ditch your debt
Evaluate all the different loans and credit card debt that you've accrued and consolidate them into a single, lower-rate loan with one easy payment. We have different options to consolidate your debt. Let us help you find the best option for you.

Create a budget
Taking stock of your financial life starts with knowing how much money you take in and how much money you spend. Start by listing your income from all sources, then list your fixed expenses such as rent, car payments, and insurance premiums. Next, list variable expenses such as entertainment, recreation, and clothing. Don’t forget to include your online subscriptions and any products or services you have relegated to auto pay, such as bills, gym memberships, tolls or goods for you or your family members, including pets. Writing down all your expenses, even those that seem insignificant, is a helpful way to track your spending patterns, identify necessary expenses, and prioritize the rest.

An easy budgetary rule: jumpstart your budgeting easily with the 50/20/30 rule. This simple rule consists of allocating 50 percent of your income toward essential expenses (rent, transportation, utilities), 20 percent toward personal financial goals (saving or paying off debt), and 30 percent toward flexible expenses (eating out, groceries, shopping, hobbies, entertainment, or gas).

A great tool we have for our members is the Budget tool within Online Banking. You can create a monthly budget and assign accounts to it. Create categories and associate your transactions to the categories in your budget. To top it off, you can have as many budgets as you’d like.  If you have questions or need help setting up your budget, give us a call.

Pass on unnecessary purchases
If you’re falling deeper into debt with each passing month, there will come a point in time where you may have to pass on purchases that aren’t a “need.” Define what is important to you and cut out the rest. Do you need that new smart TV, or do you merely want it? Turning down something you want may be hard now, but your reward will be greater savings later.

Save on utilities
Just because you have to spend money on utilities doesn’t mean you can’t cut back on the amount. Investigate ways to save electricity and reduce your heating/cooling costs. Reduce your cable bill and get rid of infrequently used paid channels (like HBO/sports packages). You could save hundreds of dollars each month by cutting these expenses. Also examine your cell phone plans and look for better deals, either with your current carrier, or with a different one. Carriers are always running specials on data plans, which can really add up over time, especially if you’re incurring overages on your plan. If you’re at home, or have a secure wifi connection, make sure your cell is connected to it so you’re not using your data plan.

Keep it up
As you strengthen your saving and budgeting muscles, use the momentum to keep going. If you get a raise at work, bank it. If you pay off your car, put the monthly payments in a savings account. Get a side hustle. You could get paid taking surveys, mystery shopping, or blogging about your passions! Read up on personal finance. Learn a new skill or better yourself in the workplace. Choosing to stay the same and doing nothing to change your situation will only ensure your financial fitness stays stagnant.

Become a fan of automation
Financial automation eases financial tasks, saving you time and increasing your efficiency.

  • Check out our Checking Protection Package: Nobody likes surprises when it comes to their checking account balance. Our Checking Protection Package includes CardValet, Online/Mobile Banking Alerts, Overdraft Transfer Protection, Courtesy Pay, and Debit Card Courtesy Pay. These services work together to create multiple lines of defense against unexpected surprises, so you always have the money you need for the things you want. These can be set up to automatically remind and protect you. Learn more about our Checking Protection Package. 
  • Set up automatic loan payments: Each month, the amount of your loan payment will automatically be deducted from a linked checking or savings account.
  • Automate your savings: Direct deposit your paycheck into multiple accounts, including one for each of your savings goals. Keeping funds out of sight helps you resist the urge to spend.

Set bills to autopay: Setting your bills to auto-pay is a great way to save you time, money, hassle, and offer peace of mind knowing your bills are paid on time every month.

Get creative
Saving money doesn’t have to be boring or a chore. Pack your lunch. Did you know that spending $6 a day on lunch means spending about $1,500 a year? Instead of downloading books, movies, or music, visit your local library or trade favorites with friends. Go generic on your favorite grocery, beauty, and healthcare items. Keep your car tires properly inflated, which can increase fuel efficiency, meaning less money spent on gas – or if you can, take public transportation or ride a bike. Get creative to find unique ways to save.

The bottom line
The start of a new year is a great time to improve your financial fitness. Use this list as a starting point,  and if you would like more information, check with your credit union. Most credit unions offer a variety of financial education options that cover budgeting, retirement planning, identity theft and more. If you aren’t a credit union member, get information on how to join at www.asmarterchoice.org.

There’s no better time to start getting fiscally fit than 2019!