Don’t let your finances be a challenge this year. There’s no better time to start thinking about how you are going to be financially secure than a new year. Start saving for retirement, begin a college fund or finally pay off your credit card. Learning how to manage your finances will lower your stress and give you the ability to achieve your long-term goals.
Set a budget and stick to it
Sit down and create a monthly or even yearly budget. Figure out how much you bring in every year and what you would like to spend without going into debt. Organize your monthly bills and prioritize your family needs and wants. There are many ways to create and track your budget. A simple spreadsheet will work, but at Marine Bank we offer an online tool called Money Manager that will help you manage your finances.
You cannot forget to think about your future which is why you should include savings into your budget. Incorporating a savings budget allows you to set aside money for emergencies and/or large purchases. At Marine Bank, you can use your debit card to automatically help you save money through our Common Cents program. Every time you use your Marine Bank debit card, your purchase will be rounded up to the next dollar and the difference will be transferred from your checking account into your savings account.
Create a plan to reduce your debt
Start by making a list of all of your debts. One easy way to stay organized is to prioritize your debts in order of the number of payments till it’s paid off. Put the one with the fewest payments on top. Another way to organize, is putting the debt that has the highest interest rate on top. Paying down your debts will help you have less financial stress.
Know what your limits are. If you’ve made large purchases last year, especially around the holidays, you need to have a plan to pay off the balance as quickly as possible. Paying your bills on time and paying the bill completely will avoid late fees and will protect your credit score. Leaving a balance on your card ends up costing more due to interest and other finance charges. You should only use credit cards when you know you will have the funds to pay the balance completely when the bill arrives. Do not make the mistake of thinking credit cards are free money or unlimited funds. Staying on top of your credit score is important. Learn more on how to improve your credit score here.
Start an emergency fund
Life happens. You need to be prepared and covered when it does. We don’t plan for health issues, car accidents or the refrigerator breaking down, so setting aside a portion of money will help ease your mind when those unforeseen disasters happen. You’ll be relieved to not have to max out that credit card or empty your regular savings.
Start saving for retirement or college
It’s never too early to start saving for retirement or your child’s higher education. There are several options at Marine Bank when it comes to saving for your future. We offer both traditional IRAs (Individual Retirement Account) and Roth IRAs.
College is expensive and it’s better to begin saving early. Setting up a specific savings account dedicated to college expenses is the easiest way to get started.
For which ever life milestone you are saving for, you can contribute as little as $25 or $50 a month. Determine what’s affordable and remember savings plans can always be adjusted.
Start your year off right and stick with your plan. Be mindful about saving and spending so you can be financially safe. Starting smart financial habits will be hard at the beginning, but in the long run it will be worth the security and decreased stress.
Written By: Michelle Graven