By: Sammi Coppedge, Marketing Assistant
A new year means new goals and new resolutions, and your money should be a part of that. As 2015 is winding down and 2016 is starting up, start assessing your finances with a year-end financial inventory. Have you begun a college fund for your children? Are you working towards paying off all outstanding debt? Are you investing? Have you spent too much and saved too little? No matter where you are at with your finances, taking a step back to reevaluate and see where you can improve will always be beneficial.
Keeping your finances in order is a long-term process. Although not every obstacle is foreseeable, organization from the start will help to make your goals more attainable. No matter what your financial situation is, a new year is the perfect excuse to get your finances in check.
Here are 10 ways you can improve your financial situation in 2016:
1. Start Investing
If you are not already, start investing your money instead of just letting it sit in a savings account. While a savings account does earn interest, it is very minimal. When it comes to investing, there are so many options to choose from. Share certificates are a great place to start, they have a low minimum balance requirements and a variety of terms. Another option is a Money Market Account. This type of investment allows for a lot of flexibility, with up to 3 withdrawals a month, and a dividend rate that is guaranteed to be a higher than a general share savings account. For more information on all of our investing options, check out our website here.
2. Pay Off Debt
With the Federal Reserve’s decision to increase interest this year, it is even more important for you to start paying off your debt. Also, take a look at how you got into that debt in the first place. Especially when it comes to credit cards, as this is usually a sign that you are living outside of your means.
3. Automate Bill Pay
If paying bills on time is difficult for you, consider enrolling in autopay this year. Every dollar spent on late fees is a dollar wasted, not to mention late payments can damage your credit score. If you do not think autopay will work for you, you can also set automated reminders in your calendar or sign up for alerts when it you are near your bill due date.
4. Build an Emergency Fund
Unfortunately, crises are never planned, therefore, people are not always financially prepared when one strikes. This year, start putting away a portion of your paycheck into an emergency savings account. Although it is recommended to save up 12-18 months of income, especially in case unemployment, it is important to remember this type of saving will not happen overnight. But even if you cannot afford to put that much away right now, any sort of savings will build over time and will help during those difficult times.
5. Create a Strategic Budget
According to Wallet Hub, only 40% of adults have a budget. Review your last few months and where your money went. What reoccurring bills do you have? How much of your income goes towards necessities like groceries, housing, and healthcare? Where did you spend money that you should not have? Creating a budget and adhering to it in the New Year is a great way to stay on track financially. If you do not know where to start, or feel as if you need some assistance in budgeting, consider setting up an appointment with one of our free financial counselors! They can help you create a budget, develop strategies to pay off your debt, and more. Check out our program, Strive to Thrive!
6. Live Within Your Means
One way consumers get themselves into trouble is living outside of their means. If you cannot afford a Caribbean cruise vacation or a new pair of designer shoes, do not bother purchasing them. This is the biggest way that consumers get themselves into trouble. One good example of living within your means is try to only put on your credit card what you can pay off within the next month. A credit card can be a good tool to utilize between paychecks, but do not put more on it than you can pay back.
7. Look Into the Future
No matter what stage of life you are in, there is probably a big expense that will require some budgeting and planning skills. Whether that be the purchase of your first home, your child’s education, or retirement, be sure to start preparing now. Starting to plan for these items today will help to lessen the burden in the future.
8. Stay in the Know
One of the best ways to stay in good financial shape is by learning more about finances. Whether that be through signing up for a financial newsletter, browsing sites like CNN Money or Yahoo Money, or simply keeping current with the news, the more you know about finances the more likely you will be in good shape.