With a brand new year comes a fresh start. After all of the chaos brought on by 2020, we could all use a new beginning! At this time of the year, we find ourselves writing out New Year’s resolutions: getting to the gym more often, starting a meditation practice, decluttering our homes, and anything else that strikes our fancy.
One category of resolutions we often overlook is our finances. A new year is the perfect time to set goals, solidify new habits, and decide what’s working for us and what isn’t.
This month, we’ll share a few ways you can start 2021 financially strong!
Evaluate your goals.
Ask yourself, “What are my short-term, mid-term and long-term goals?” A short-term goal is something you might accomplish in the next six months to a year, while a mid-term goal might take place in the next one to five years. Long-term goals take place in more than five years, and a common example might be retirement.
Having goals in place is really a great way to prioritize your spending and give yourself an incentive not to make impulse purchases. For those goals to really stick, make them SMART goals – specific, measurable, attainable, relevant or realistic, and time-bound.
Spruce up your budget.
Once you’ve figured out your goals, you’ll want to focus on your budget. Many people don’t have a budget set in place, and for those who do, it might not adequately reflect your needs or your current situation, especially in a pandemic.
Everyone’s budget is going to look different, so you have to make it work for you – whether you prefer pen to paper, a budgeting app, or even a Microsoft Excel spreadsheet. Addition Financial offers online budgeting tools through their blog and their Enrich platform, or members can make an appointment at one of the branches to have a dedicated team member assist with the budgeting process.
A good rule of thumb is to follow the 50/30/20 model – in other words, put 50% of your expenses toward essentials, 30% toward lifestyle and 20% toward debt repayment. If 20% is too daunting of a goal, do what you can and build up to that number over time. Any small amount you can set aside toward savings will help you to establish positive habits and will make a major difference in the long run.
You can make those savings automatic by setting aside a portion of your direct deposit to go into your savings account if your employer allows you to do so, or setting up an automatic transfer of funds from checking to savings on a regular basis.
Know what’s in your account at all times.
It’s important to keep an eye on your accounts, especially before making a purchase. With mobile and online banking at our fingertips, this is easier to do than ever before. Knowing what is in your accounts will allow you to avoid unnecessary overdraft or courtesy pay fees from your financial institution, and it will also help you to safeguard against fraud.
Identity theft and fraud have seen an uptick during the pandemic, as scammers tend to prey on our sense of fear and distraction. The sooner you catch any fraudulent activity, the sooner you can stop it in its tracks and eliminate any damage.
Find a financial institution you love and trust.
Get to know the team members at your financial institution, and let them serve as a resource for you. Credit unions can be especially impactful because they offer all of the same products and services as traditional banks, but with lower fees and more competitive interest rates. Credit unions are also not-for-profit, and tend to have a stronger focus on serving their communities.
If you’re on the hunt for a new financial institution, Addition Financial is a credit union founded by educators with strong roots in Central Florida. With branches in six counties and growing, Addition Financial is part of the Presto! ATM network for added convenience, and has offered continuous service throughout the pandemic and Saturday hours at nearly all branches. Plus, you’ll earn $100 just for opening your first checking account with Addition Financial! Learn more about the perks of credit union membership here.
The Sum Up
As you set goals for yourself in 2021, consider making those goals financial as well!
Valerie Moses is a Senior Relationship Manager at Addition Financial Credit Union, where she manages public relations and various Central Florida partnerships. When she is not at a community event or cheering on the UCF Knights, she can be found at her lifestyle and travel blog, Wellness & Wanderlust, along with her podcast of the same name.
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