Financial New Year’s Resolutions: It’s Not Too Late!

January 28, 2016 • Author: Tyler Nickerson, Sales and Service Officer- Columbus Downtown

Resolutions are a time-honored tradition at the beginning of each new year. While many people take strides to eat better or exercise more, there’s often one pledge missing from their resolution list: Finances.
 
To help jumpstart your financial resolutions in 2016 and get your financial house in better order, consider the following suggestions:
 
Resolution 1:  Budget. The first step is often the hardest and that’s true when it comes to creating a budget. It’s also necessary if you want to get on a solid financial track. Begin your budget process by reviewing current expenses and identifying those that you could easily do without. (For instance, do you really need that $5 latte every day? Replace it with plain coffee and you’ll save about $1,800 a year!)
 
Resolution 2: Set up an emergency fund. Preparing for the unexpected is always wise. Financial planning experts typically say the rule of thumb is to have three to six months' worth of emergency funds on hand in the event of a job loss or other unexpected life events. Begin your emergency savings by putting away a fixed amount, no matter how little, each week; you’ll be surprised at how quickly your cash reserves will build up. Best of all, you’ll be getting some welcome peace of mind at the same time.
 
Resolution 3: Pay down debts. Most people have some type of debt, whether it’s a mortgage, car loan, student loans, or credit cards. While it’s often tempting to pay just the minimum on what you owe each month, consider paying more. When you make just the minimum payment on the balance of a debt you owe, you may end up paying much, much more money in finance charges. On the other hand, you could save hundreds, even thousands, in interest by simply increasing your monthly payments.
 
For example, if you have a credit card with a $2,000 balance at 14% APR, paying the minimum will cost $1,833.24 in interest. If you instead send $100 a month and make no future charges, you'll only pay $290.77 in interest. That’s money in your pocket!
 
Resolution 4: Improve your financial IQ. Financial fitness means educating yourself about savings, retirement, and all things money related. There are many free money-management tools, apps, and resources available online. Many of these tools are designed for your specific stage of life - i.e. whether you’re a student, career professional, or someone nearing retirement. Salin Bank’s financial experts also can discuss ways to help you reach your financial goals.
 
Resolution 5: Dream big. Research suggests that when you set a financial goal (or any goal for that matter!), it helps to dream big - but at the same time, be realistic and flexible.
 
The bottom line:  Exercising more, losing weight, and choosing healthier food options are all laudable goals to focus on during the new year. But, don’t forget about your financial fitness commitments. Creating money goals now - and sticking with them for the long haul - is a resolution that can ultimately pay a lifetime of rewards.