It's common for people to have big financial resolutions for the new year, and it's not uncommon for them to fall by the wayside a few months in.
Chad Waddoups, Vice President of Wealth Management at Mountain America Credit Union, joined us with ways to stick with those resolutions.
He says the biggest way to find success is to have a "bias toward action". Chad explained that means to start making some change or taking action immediately while you are motivated.
Go through your past three to six months of credit and debit card statements and banking statements.
Look first for recurring payments like subscriptions or memberships and ask yourself if you are really using those or if you could stop them and see how you feel about it.
Shop service providers like cable, cell phone, internet, and auto or home insurance to see if you can find the service you want at a better price.
Often that can cut hundreds of dollars a month right there.
As you go through those statements, write a to-do list of anything you want to follow up on.
Breaking that down into line items helps you make progress because it isn't as daunting or undefined a goal as just saying "I'm going to cut my spending." Now you have an action list.
Chad says you can do something similar to pay off debt. He says, "First, gather a list of all the debts you have and who you owe, plus the balance, minimum payment and interest rate. Having all that in one place will allow you to decide in what order to pay those down, whether that's focusing on the smallest debt or the highest interest rate. You want to focus your efforts on paying down one debt at a time while paying the minimum payments on the rest."
If you're not sure where to begin, Mountain America has several ways to help including online tools at MACU.com/guide. While you're there, you can also schedule a free call with a Financial Guide or make a time to come into any branch for a Debt Rescue consultation.
If you made a resolution to save more, Chad says you can do the same exercise with cutting your expenses. That will help you find more money to save quickly.
But, he says it's important to know what you are saving for. If it's a short-term goal like a vacation, you could open a certificate account to help you earn a little bit more on the savings you set aside.
Chad says certificate accounts are a great way to keep yourself from dipping into that savings because you can't just transfer the money out whenever you want. You agree to deposit the money for a chosen length of time, but you can set it up so that the account matures around the time you'll want the money. There are growth certificate accounts that allow you to add to your balance along the way—you can open one with as little as $5.
Lastly—and this is a good tip for increasing retirement savings, too—the next time you get a raise at work, don't even let that money hit your checking account. Set it up to go into savings and continue to live off the same amount you were getting before. If you are doing OK with what you have now, there's no reason to get used to spending more if your goal is to save.
Speaking of retirement, it's never too early to increase your retirement savings. In fact, the earlier you start getting serious about saving for retirement, the less you have to save overall. That's because your money has more time to work for you.
With a 401(k) or similar account, you can increase the amount being contributed from your paycheck. Increase it when you get a raise or when you pay off another regular expense in your budget, like an auto loan or credit card.
It's really important to meet with a professional financial adviser who can look at your overall financial picture to make sure you're saving enough and in the right places. You may have someone who works with your employer's 401(k) plan, or if you don't have someone, Mountain America Investment Services would be happy to look it over for you.
VisitMACU.com for more information.
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