As the new year begins, you may be considering some exciting resolutions. As your credit union, we’d like to encourage you to make one of those changes: a dedication to financial security and success. Don’t just resolve to become physically fit this year; become financially fit, too. We’re here to provide you with the information and resources you need to make 2014 your most financially fit year yet.
• Weigh in. When struggling financially, it’s often difficult to jump on the scale and get a real picture of where you are. If you’re going to make changes this year, start by being honest about where your finances are right now. Weigh in. Make a list of all your debts and liquid assets. Include credit cards, student loans, personal loans and outstanding medical bills in your listing of debts. Then, list all your sources of income, including child support and contract jobs.
• Set goals. Becoming debt-free is an ideal goal, but if your debt adds up to more than your yearly income, it can be a frustrating and even counterproductive goal. Instead, set smaller, realistic goals that can bring success in a short period of time.
• Be prepared. Unexpected expenses happen. A car needs new tires, a child outgrows his jacket, an appliance needs to be repaired — but with an emergency fund, you’ll be ready for these unplanned-for occasions. Before you attempt to pay off any debt, set aside some cash that’s easily accessible so you can turn to it rather than a credit card when an emergency comes up.
• Make a plan: If you want to become financially fit this year, a budget is a must-do. You’ve already taken stock of where you are financially, so now it’s time to plan where you want to go. List all your monthly expenses and compare your list to the list of monthly income you made earlier. Your income should exceed your expenses. You cannot become financially fit if you spend more than you bring in each month. Find a way to either cut expenses or increase your income. You can easily trim monthly pedicures, car washes, dinners out and maybe even gym memberships from your expenses.
• Lose that debt. Getting rid of debt is the single best thing you can do for your financial future. When you figure late fees and interest into your budget, you don’t make much progress on the principal balance. Start saying goodbye to your debt by paying off your smallest debt first. Then, take what you would normally pay each month on that debt and apply it to the next-smallest debt. Continue paying off all your debt this way.
Take the time each month to look at your budget and your bottom line and make adjustments as you go. Don’t be discouraged when you slip up. Instead, look at it as an opportunity to learn and regroup so you can push hard to your financially healthy and secure future.
Information provided by Brenda Reichert, branch manager, 1225 Copper Creek Drive, Suite M, Pleasant Hill, 515-278-5333.