8 realistic and achievable financial goals for 2021
New Year – New Financial Goals
It’s that time of year again when we all self reflect and set new goals for ourselves. Financial resolutions are among the most popular goals set by individuals and families each year. A recent study from Fidelity Investments, reports that 65% of Americans plan to make a financial New Year’s resolution in 2021.
In order to change or improve your financial situation, or make progress towards any financial goals, you must identify what those goals are. Are you looking to get out of debt? Will you be buying a home? Do you want to contribute to your employer 401(k)? Is it time to start saving money? As you think about setting that goal for yourself, be sure to set small, realistic and attainable goals that will help you work toward your larger goals. Regardless of what your resolution is, the key is sticking to it! Here are eight possible financial resolutions that will be sure to help you improve your financial status in the new year.
Make a Realistic Budget and Stick to it
Creating a budget is the best thing you can do for yourself to establish financial success. Managing your money well is the key! Track your expenses and identify areas where changes can be made. A range of apps and software programs can be used to help you track your spending. Prioritizing and categorizing your spending will help in differentiating between the expenses that you need such as mortgage or rent, groceries, and utilities, and the items you want. A budget should help you determine if you are living within your means and help you understand where you are spending your money. As you track your spending, you should look for ways to cut back on your spending. What expenses can be cut back or eliminated all together?
Get Out of Debt
Another way to improve your financial situation this year is to get out of debt. This can help you reduce the amount of interest you are paying. Reducing and eliminating debt is a lofty goal for some, but worth the effort. Set small, achievable goals towards becoming debt free. Being debt free gives you more financial choices and more peace of mind. To start, set up a debt payment plan. Then commit! Figure out what sacrifices need to be made in order to pay off the debt.
Start Saving Money
In addition to budgeting and paying off debt, saving money is an essential component of financial success. The average person should be saving at least 10% of their income each month.
Two Simple Ways to Save Money –
- Commit to several No Spend Days each month. On these days, no money leaves your wallet or your bank account. Commit to eating at home and finding free entertainment. Over time this can make a difference and will help establish some new more frugal financial habits!
- Cut back on bad financial habits. Unnecessary shopping, splurging on coffees and treats, or paying for membership you aren’t using, are all bad money habits. Identify at least one and eliminate it!
Pay Attention to Your Credit Score
Checking your credit through a credit report in an important way to verify your credit standing. Your credit score is the key to getting financing from a bank for any big ticket items such as a house or a car. This score also determines the interest rate at which you will pay the bank to borrow the money. The higher your score is, the less risk you present to the bank. Consumers are entitled to one free credit report each year from the three credit bureaus, Equifax, Experian, and TransUnion. You can access all three at AnnualCreditReport.com. Additionally, reviewing your credit report on a regular basis will allow you to spot any signs of fraudulent activity.
Call Your Credit Card Company
If you are maintaining a monthly balance on your credit cards, it is time to develop a plan to pay off that debt. Credit cards can charge an annual percentage rate between 15% – 20% or even higher! This makes it so important to pay off balances in full every month. The best advice is to limit credit card use altogether. Sometimes this is not possible. Take a few minutes to call your credit card company. If your card is in good standing, consider negotiating a credit limit increase to improve your credit score, or ask for a lower annual percentage rate. Once this is done, it is important to avoid spending on the card that reaches your limit or making any late payments. This will hurt your credit score.
Establish an Emergency Fund
A great way to protect yourself when hit with a financial emergency, such as a job loss or an unplanned expense like car or home repair, is to have an emergency fund. This money should ideally be three to six months of pay. This money acts as your safety net and can potentially prevent you from going into debt or using funds that were designated for other financial needs. We have learned through the last year with the pandemic how fragile life is. Our financial situation can change quickly and unexpectedly. Setting up emergency money may need to happen over time and gradually, but it is well worth the sacrifices that may need to happen to do it.
Take Care of Home Maintenance
Preventative home maintenance is one of the best things you can do to help save money throughout the year. Changing air filters, patching leaks and inspecting your ventilation system are crucial to your budget. Maintaining your home can keep your heating and cooling bills down and help your appliances run longer and more efficiently.
Open a New Bank Account With a Bank You Can Trust
Jarrettsville Federal Savings and Loan put down roots in the community in 1869 as a strong, stable financial institution. Over the years, we have developed relationships that span generations. Our 150-year tradition of community banking helped us to grow. Today, we continue to thrive, with checking, savings and loan products that meet our customers’ needs, technology that brings us into the future, and community service that gives back to our customers.
Staying motivated to achieve your goals is the toughest part of New Year’s Resolutions. Start small and check your progress regularly. Establish a support system to encourage you. We value our relationship with you at Jarrettsville Federal and are here to support you. Contact us at 410 – 692- 5151 or visit our website at https://www.jarrettsvillefederal.com/.