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 May’s blog covering savings and debt, click here. We hope you find this month’s information helpful.
Session 1a: Set up auto-pay.
When you tracked your expenses back in February, did you remember everything? Or did additional February bills pop up in March, April, or beyond? Add these stragglers to your spending and savings plan, and then use that section of your budget as a checklist for automating your bills to ensure you never miss a payment.
Tip: Another great way to streamline money management is to sign up for electronic statements. We offer automated bill payment and electronic statements to make financial management easy.
Session 1b: Get your credit score.
Automating payments ensures you pay your bills on time, which impacts your credit score. Paying down debt and paying bills on time comprise 65% of your FICO® Credit Score. Because credit ratings can impact everything from qualifying for jobs and rental applications to saving money on insurance, it’s essential to understand what goes into them and where you currently stand.
Tip: There are many credit scores, each with different numerical ranges. To ensure you and the company requesting your score are on the same page, ask them what kind of score they use and then access that one. Note: Your Credit Union provides free FICO® Scores with your quarterly statements. Opt-in here to receive your FICO® Score.
Session 2a: Track your progress.
Use this 2×2 session to see how well your actual outlay matches the goals you created earlier in the year. If you’re like most people, there will be some creep in your numbers. Consider whether it’s time to tighten things up or if a new plan that reflects a change in your goals or circumstances is needed.
Tip: If you’ve gotten a raise since you last did a budget, consider putting much of that raise toward achieving your goals. It can be tempting to spend more, but that may not be what brings you the most happiness. We offer a range of savings accounts, many with nationally-leading yields to help you accumulate wealth faster. Learn more about our Savings accounts here.
Session 2b: Improve your cash flow.
After conducting a mid-year financial review, most people look for ways to improve their monthly bottom line. It comes down to cutting expenses or generating additional income, but how you do this is entirely up to you. You know what will work best for your life. There are no wrong answers, so take some time to brainstorm ways to put more of your money to work for you.
When thinking of ways to have more money for your goals, consider what brings you the greatest happiness. Look at the expenses on your list, then ask yourself if that particular thing brings you happiness. If not, cut it out. On the flip side, consider what you enjoy when thinking about work that could bring in extra cash. Otherwise, it won’t be sustainable, and the bonus income will quickly dry up.
Tip: This is a terrific time to negotiate better prices with all your service or content providers by calling them and letting them know you’ll switch to their competitor if they don’t give you a better deal. As you compile your list, look for monthly bills for services you no longer use. Cancel those immediately.
Final thoughts.
The year is half over, so what better time to assess your finances and make moves to set yourself up for further success or correct areas that need improvement? Enrolling in auto-pay and getting your credit score are two great ways to start. Brainstorming ways to improve or add to your cash flow is another step that can pay short- and long-term benefits. The year is flying by. Start now.
Thanks to our friends at Balance for these smart tips.
