Something about the dawn of a new year brings out our willingness to kick old habits to the curb and start afresh. If you’re ready to create impactful and effective financial resolutions that best serve you and your goals, it’s time to lean in. With a few tweaks, a little planning, and some disciplined effort, 2024 can be the year you start to make your money goals come to life. We’re here to help you launch a successful plan by going through the vital first steps of achieving your financial resolutions with insight from our friends at the Filene Research Institute. Ready?
1. Write It Down
First, writing down — or typing out — goals makes them feel more real. Set aside at least 30 minutes to give the list the attention it deserves. Remember to make your goals personal so they become more meaningful (and doable) for you. If you want to save $5,000 this year, write down not just the amount but what it’s for — and be specific … it’s not just a down payment; it’s the down payment on a new hybrid car. And it’s not just a vacation, it’s a week in Hawaii. The milestones you want to reach should also be reasonable and attainable.
If your list is more than five items, you may be spreading yourself too thin to achieve meaningful gains. Instead of a scattered approach, financial experts say to prioritize your top goals and devote time and energy as appropriate.
2. Grow Your Emergency Savings
Unexpected expenses (and life events) can happen at any time. That means maintaining an emergency fund should be a non-negotiable. A great way to build or rebuild this type of fund is by setting up automatic deposits to move money from your paycheck (or wherever it lands) into a separate savings account regularly. This works well because when you don’t see the money, and we don’t have easy access to it, we rarely miss it. Your Credit Union makes this easy and profitable. Set up and direct automatic deductions to our Online Savings account to earn an impressive 4.00% APY* (with Direct Deposit, 3.50% APY without) with no minimum balance required.
3. Prioritize Retirement Accounts
If your company offers a 401(k) match and you aren’t signed up, send an email to the HR department and find out how you can start making contributions (to earn the match) pronto. Not diverting the funds necessary to earn the match is like leaving free money on the table. As for those funds you are diverting, many people find they don’t even miss them. Another way to save for retirement is an individual retirement account (IRA). An IRA offers tax savings, which can improve your non-working years. Our High Yield IRA Savings Account offers 3.50% APY without fees or balance tiers.
4. Pay Down Credit Card Debt
Most people never plan to accrue a mountain of credit card debt. Unfortunately, we know it happens, especially right after the holidays. And the longer you leave your credit card balances to grow, the more you’ll pay to wipe out the balance. Not only are you paying the base price of the item you already bought, you’re also paying credit card companies around 24.00% APR for the privilege of paying it down over time. But it’s possible to create an achievable resolution for what may feel like an impossible task right now.
One of the best approaches to paying down your debt is the “debt avalanche” payoff method. It allows you to tackle the debt with the highest interest rate first. To do it, you’ll start by making at least the minimum payment on every debt you owe. At the same time, you’ll put any additional funds you have each month toward your debt with the highest interest rate. (For example, some debt may only cost you 8.00% interest, while others, like credit cards, could be closer to 24.00%. You’ll pay down the 24.00% debt first.) You’ll continue putting all your spare change into that highest-interest debt until it’s paid off. Once achieved, pat yourself on the back, and then apply the extra money in your budget to the next highest-interest debt. It may take a few years, but you can eventually whittle down all your high-interest-rate debt this way until it’s completely gone. (For other lower-rate debts, like mortgages and student loans, paying them off on the schedule you’ve been given is the smarter move. Why? It leaves you enough money to save and invest for your other goals.)
While you’re bringing down your debt, here are more tactics to put into action. Consolidate your high-interest credit card debt in a lower-cost loan or line of credit. Your Credit Union offers exceptional loans with rates substantially below the average card interest rate. Or you could transfer your card balance to one of our low-interest Credit Cards with rates as low as half those for bank and retailer cards.
5. Save For A Home
Real estate can be a good investment for those who plan to stay in the same place for several years. And because a home is typically the largest purchase most people make during their lifetime, saving up for a down payment usually takes a while. If 2024 is the year this goal will be within reach, now is your chance to make yourself an even stronger candidate for a mortgage so you can score the lowest interest rate possible. Financial experts say a good first step is to know your credit score and, if needed, begin working to improve it in the first few months of the year. A credit score (which ranges from 300 to 850) is like a report card that stays with us throughout our adult lives, reflecting how we handle money. You can request your credit report from AnnualCreditReport.com. Your Credit Union also provides free credit scores with monthly statements.
6. Prepay For A Vacay
The ability to spend money minus the stress is one of the reasons we work so diligently to save in the first place. Since most of us don’t have an unlimited travel budget, building up a “fun fund” means you’ll need to develop a savings plan for your trip, just as you would for all other financial goals. (Granted, it may be a smaller goal, but still requires saving.) So, if you need to amass $5,000 for a family vacation, you’ll need to sock away roughly $417 a month for 12 months to meet that goal. If you aren’t quite sure how to save that much with your current spending plan, take a look at your expenses to see where you could make adjustments. For example, would eating out less often help bring your vacation dreams to life? If so, plan more meals at home and move the extra money to your fun fund each week. Your Credit Union has a purpose-made solution to help you reach your goal. Our My Account savings account. Name the account anything you like (within reason), like “Paris Here I Come.” We set up automatic deductions through the year that grow with good interest, so when the vacay comes around, your expenses are covered.
7. Boost your Financial Know-How
The more you know, the more you can help your money grow, stay on your budget, and plan for the long term. Unfortunately, financial education is not a standard part of our educational system. As a credit union, we’re committed to helping our Members live their best financial lives. A big part of that is helping them be savvy consumers. Visit our Financial Education Center for learning modules that help you manage a budget, improve your credit score, and more. Each easy-to-follow module helps improve your money IQ to help you achieve your goals.
One Final Thought
We hope these seven money resolutions help you thrive in 2024 and beyond. For more ways to save money, lower your credit card debt, and achieve your financial goals, visit our website, come in to one of our branches, or call us at 800.877.2345. Happy New Year!
*APY=Annual Percentage Yield. Visit figfcu.org for disclosures.
