The 2×2 System is where you set aside two hours on the calendar two times a month to complete a predetermined financial task. This modest but consistent effort can help you sustain financial health and build wealth in bite-sized chunks. To view January’s blog covering estate planning and helping your parents plan for the future, click here. We hope you find this month’s information on tracking spending and setting savings goals beneficial.
February Session 1: Track your spending.
Before you can truly harness the strength of your financial resources, you need to know where the money is going. Whether you prefer filling out a worksheet or entering your numbers into a digital spreadsheet, getting a handle on how your hard-earned cash moves around is essential for making the best choices for your future.
Tip: It takes work to write down all your spending or remember to keep every receipt. If you have online access to your accounts and use a debit or credit card for all your purchases for January, you’ve instantly simplified the process of recording your expenditures.
Once you’ve tracked all your expenses for January, do a quick review of other expenses that come in throughout the year, such as property taxes and insurance payments. If you’re not paying these monthly, divide the yearly amount by 12 and add them to your January total to create a more accurate picture of your monthly expenses.
Now that you’ve got a clearer idea of your expenses, review your income. Does it cover your expenses? If not, it’s time to cut expenses or figure out ways to bring in additional income.
If you need help creating a budget, our “Budgeting Tool” learning module in our Financial Education Center may be just what you need to get started.
February Session 2: Set your savings goals.
Meticulously charting your spending habits is one of the least fun parts of maximizing your money. It just is. So, to balance that out, the second 2×2 session for the month is more pleasurable. That’s because you get to dream! What do you want to accomplish this year? Got a fabulous vacation in mind? Want to wipe out your credit card debt? Is it time to buy a new or used car? Now is the time to commit to your goals.
Tip: Famed author Antoine de Saint-Exupéry wrote, “A goal without a plan is just a wish.” Make your financial goals SMART to transform them from hope to reality faster.
Here are two more ways to help you get on the path to achieving your savings goals. Open a savings account. Our Online Savings account pays 3.50% APY* with Direct Deposit (2.00% APY with it) – that’s more than 8x the national average.** There’s no minimum deposit and no maintenance fees. Adding Direct Deposit not only helps you earn more on your money, it makes saving automatic, which can help you reach your big goal easier.
Plan for the unexpected. Even the best budget and realistic goal can be upended by unexpected expenses. An emergency fund can ensure you stay on track and help prevent you from being discouraged. Our Rainy Day Savings account can help. There’s no minimum balance, and you’ll earn 2.15% APY† on balances up to $2,000. To help you keep this account for emergencies, you can make two free withdrawals per calendar year. It’s a bit of discipline that can help you meet your savings goals and handle a financial emergency with ease.
Final thoughts.
Tracking your spending and setting savings goals are powerful steps to financial independence and helping you lead your best financial life. Finances can often seem complex and intimidating, but starting simple with these two actions can help build confidence and a feeling of control and prepare you to achieve all the 2×2 tasks we’ll share throughout the year. As the saying goes, from little acorns, mighty oak trees grow.
This article was developed in partnership with our friends at Balance Pro
*APY = Annual Percentage Yield. APY is the annualized rate based on a compounding period of one year. When the deposited money earns dividends and the accumulated dividends starts earning dividends as well, we are talking about compounding. Fees could reduce the earnings on an account. All yields except Certificate yields are subject to change retroactively to the beginning of the month.
Rate bonus is for a minimum of $1,000 monthly ACH Direct Deposit or Agent Net Check into a Farmers Insurance Federal Credit Union Checking Account. Rates are subject to change at any time.
No branch or call center access with this account.
**The national average for this type of account is 0.42% APY, based on rates published in the FDIC Monthly National Rates and Rate Caps accurate as of 12/16/2024.
†APY = Annual Percentage Yield. Rates are subject to change at any time.
Limit one Rainy Day Account per qualified membership. Rainy Day Savings is an interest earning savings account eligible for 2.15% APY interest on balances up to $2,000 and the standard Membership Savings rate on balances over $2,000 when funded via recurring ACH deposit or other qualifying external funds. Dividends are calculated by applying a periodic rate to the Average Daily Balance in the account for the Dividend period. Interest earned will be credited to the account at the end of the statement period. This account is limited to two withdrawals per calendar year, each withdrawal in excess of this amount will incur a $20 excessive withdrawal fee that must be paid at the time of the withdrawal. This account does not qualify for withdrawal access via debit or check and does not support transactions originating via VRU, online banking, mobile banking, or ATMs. Withdrawals can be made in person at a Credit Union branch or by calling us at 800.877.2345. This account does not qualify for overdraft protection. Account holder must be a member with a regular share account who is in good standing. Current interest rates and the annual percentage yield may be found at the Credit Union’s website, may be verified at a Credit Union Branch or by calling 800.877.2345. Interest rates earned and qualifying dollar amounts for interest earned are subject to change at any time. APYs and eligibility criteria are subject to change at any time. Fees may reduce earnings.
