By Bonita Van Otterloo, Marketing Director
Have you set your resolutions for the new year? Personal finance is one area where people usually want to make changes. Scan this list of 20 financial resolutions to make sure you haven’t left anything off your own list. Have questions or need help making your resolutions stick? Visit one of our locations or give us a call and let us help.
1. Create a budget.
A good budget provides a flexible game plan for every cent you bring in. Instead of spending without knowing if you can really afford it, or if this purchase aligns with your overall financial goals, your budget will help you make spending and saving decisions in advance.
2. Resolve to stick to your budget.
Creating a budget is one thing; sticking to it can be harder. Set yourself up for success by creating a realistic budget with enough flexibility to absorb occasional errors or overspending. If you need help, look for an accountability buddy partner.
3. Build an emergency fund.
An emergency savings account helps you stick to your budget by providing extra funds when something unusual comes up such as an ER visit, car repair, vet bill, or job loss. Start an emergency fund with a short-term funding goal of $500 or $1,000. Once you hit that milestone, raise the bar to a month’s worth of living expenses. Eventually, you’ll ideally stockpile 3-6 months’ worth of your cost of living.
4. Review and rank your debt.
If getting out of debt is one of your big financial goals, the first step is to review and rank it. Make a list of all your credit accounts: mortgage, car loan, student loan, personal loan, credit card, and/or anything else you owe. Then rank everything from highest to lowest interest rate. Once you make the minimum monthly payments on everything, allocate any extra money you can toward paying off the highest interest debt first.
5. Calculate your debt-to-income ratio.
While you’re reviewing debt, take a minute to divide your total monthly debt payments by your gross monthly income. This will give you your debt-to-income ratio, an important percentage that lenders use to assess your credit-worthiness. Aim for less than 43 percent; if you’re higher than that, look for ways to pay off debt faster.
6. Check your credit report.
Under Federal Law, every American is entitled to a free annual credit report from each of the three major reporting companies. Visit the official website to request yours. Checking your credit report can help you detect errors or signs of identity theft.
7. Identify your bad spending habits.
From eating out to impulse shopping, we all have at least one bad spending habit. Identify yours and take steps to reduce this category of spending in your budget.
8. Pay yourself first.
Saving should always be your biggest expense. Set up a recurring deposit to your savings account so you don’t need to remember.
9. Regularly check your finances.
Schedule a weekly budget check-in and stick to it. Keeping an eye on your spending and progress toward financial goals will help you stay on track.
10. Cut back on unnecessary expenses.
We won’t tell you what is unnecessary--that’s for you to decide. As you review your monthly expenses, look for anything you no longer use or can do without.
11. Open a savings account for long-term goals.
For long-term savings goals, it’s good to have a mix FDIC-insured savings accounts. Taking a risk in the stock market is great for retirement savings when you have decades to accumulate a nest egg. For other long-term goals, such as a house down payment or emergency fund, it’s safer to keep your money in an account that earns interest but is also protected from loss.
Here are 3:
12. Update your will.
Everyone should have a will, so if you don’t have one already, that’s your resolution. For those who do have a will, take a look at it to check for anything that needs updating, such as the addition of a child or a change in marital status.
13. Update your beneficiaries.
As with reviewing your will, it’s useful to check the beneficiary designations on your life insurance policy, retirement account, and other financial assets. Make any needed updates.
14. Identify financial goals.
It’s hard to make decisions about everyday expenses when you don’t have a clear compass of financial goals to guide you. Make a list of big-picture goals for your finances such as paying off your mortgage, saving for college, and so on.
15. Plan for future expenses (education, a home, a car).
Even if you just bought a new (or new-to-you) car, the day will come when you need to buy another one. Now is the time to start saving for predictable future expenses.
16. Schedule a conversation with our Wealth Management Group.
Peoples Bank Wealth Management Group has a team of trust, investment, insurance, and farm management professionals who will partner with you to help you reach your financial goals. Make an appointment today!¹
17. Think about retirement.
What does your ideal retirement look like? Do you want to travel? Relocate to a different state? Whatever your dreams, the best way to make them come true is to break them into manageable steps you can start taking now. Contact Peoples Bank Wealth Management Group to start planning.¹
18. Protect your farm or business with insurance.
19. Take advantage of Digital Banking.
With our Online and Mobile Banking app, you can check your available balance, deposit checks, view statements and more. Improve your finances by using Digital Banking to keep track of your accounts or to prevent an overdraft.
20. Review your employee benefits.
Get ready for your company’s next open enrollment period by thinking through your current elections and what you’d like to do differently next time to either save money on benefits or increase your financial security through various insurance products.
1. Investment products are not FDIC insured, not a bank deposit, not guaranteed by the bank or any US Government Agency and principal may lose value.
2. Insurance products are not FDIC insured, not a bank deposit, not guaranteed by the bank or any U.S. Government Agency and may lose value.