9 Quick Tips to Get Your Finances in Shape for 2019
Many Americans spend more than they make. Are you one of these ‘super spenders’? There are many ways to start 2019 with a steady hold on the financial future.
Review these nine, quick tips to help get your finances in shape for the new year.
Money In = Money Out. Know where your money is going.
One of the most financially empowering things you can do is know where your money is going. Start by tracking everything for one month. Then compare it to your account statements. Be sure to record smaller purchases, like coffee or snacks to get the whole picture of your spending habits.
Reevaluate needs vs. wants.
Prioritizing spending means breaking down your spending into two categories: needs and wants. What is truly a need when it comes to your monthly spending? Establishing these differences will help you determine what is required to live within your means.
Use a budget tracking system that works for you.
Some people prefer to budget and organize their finances with spreadsheets, while others prefer a more digital-driven process. You can start rebuilding your budget for 2019 with our easy-to-use, free Budgeting Tool.
Consider loans you may need in 2019.
A new year might mean a new car, house, or student loans. If you see a need for a new loan in 2019, start to incorporate that cost into your budget, and see if you’ll need to reprioritize your monthly spending. (It’s also a great way to encourage saving for this loan! For example, if you’re anticipating taking a loan out in June, you can start saving at the beginning of the year to help pay off your loan early.)
See if there are opportunities to grow your financial portfolio.
There may be financial growth opportunities available that you haven’t heard about yet, or maybe you started a new career with a new employer that offers different investment options. Consider contributing to your 401k with your employer’s matching funds or rethink your savings options by using our free calculator, How Much Should I Save Each Month? Or check out our Investment Options module which covers a collection of possible investments:
Savings
Bonds
Mutual Funds
Stocks
Make a plan to reduce or eliminate debt.
The ending of the holiday season may mean more credit card debt than desired going into the new year, so make a plan to reduce or eliminate it. If you have multiple cards carrying balances, target paying down one at a time starting with the card with the highest interest rate. That can reduce your utilization rate, which may give your credit score a boost and save on interest, as well as make progress toward debt elimination.
Visit our free Credit Scores and Reports module to learn more about how your credit score is calculated and how you can help protect your credit score.
Ask for lower interest rates.
If you’ve been working on reducing or eliminating debt and have a history of making on-time payments, consider contacting your lenders to ask for a lower interest rate. Saving on interest rates could add up to hundreds of dollars in one year.
Have the ‘Money Talk’.
If you have a spouse or partner with who you share financial responsibility, don’t be afraid to have the money talk. There are many great ideas for setting up a comfortable way to discuss finances:
Have an agreed time limit for discussing finances. Setting a beginning and end time for your discussion.
Speak in a neutral, private area. Conversations about finances are important, but make sure you’re in a neutral space.
Share your money stories. Talk about how your parents handled money and how that’s helped you make your financial decisions.
Follow the 50/20/30 rule for budgeting
Following the 50/20/30 rule for budgeting can be a great start to getting your finances back on track. You’ll begin by breaking down your budget into three categories:
50%=Needs. The things you can’t do without: groceries, housing, utilities, health insurance, and transportation.
20%=Savings. This can help you cover unexpected expenses as well as achieve your long-term financial goals.
30%=Wants. Think of this category like a “flex cost”: cable, cell phone plan, or entertainment.
Providing resources for taking control of your personal finances is one of the ways we help our members achieve their goals. Whether it’s paying down debt, better money management skills, learning how to invest, or saving for a big life moment—the credit union is here for you.
You can become a member today.
