October is Financial Planning Month

Tips for Financial Planning

Financial planning is the process of creating financial goals, both short-term and long-term, as well as a plan for how to achieve those goals. October is Financial Planning Month. It is the perfect time to reassess your finances and make small changes. It is time to take action for better financial success.

Financial planning includes investing, retirement planning, and tax planning, as well as ways to get your finances in order and create a smart budget. All of these actions will help you ensure a safe and secure future. Plans that are short and concise are more effective than plans that are long and overly complicated. Here are some simple steps that everyone can take this month to take a fresh look at their spending and saving habits.

6 Steps To Take Towards Financial Security

  1. Create a Budget

Using the last few months of expenses and income, create a budget. Find ways to eliminate non-essential costs, such as dining out, specialty coffee purchases, unused memberships, and streaming services. Take a look at your credit card and bank statements and tally up your spending. Adjusting your spending can free up money for debt payoff or contributing to your savings. As you examine your spending habits, see if you can find areas to cut back. Even small changes can add up over time. 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.

2. Pay Your Bills On Time

Late fees and penalties add up and can negatively impact your credit score. Fees add up and they eat into your hard earned money. Part of your financial planning involves a plan for paying your bills on time. You should also have a plan for paying off any debt as part of this plan. One way to cut back on these fees is to take advantage of banking and bill pay options that are automatic to ensure your bills are paid on time each month. Prioritize your debt payoff.  The longer debt accumulates, the bigger it will get and interest charges can add up.

Set up ACH payments.  Pay your bills automatically each month and never miss a payment again. Automated Clearing House (ACH) payments are electronic payments that pull funds directly from your checking account. The money automatically moves from your bank account, avoiding the need to write a check or initiate a credit card transaction. ACH is the largest payment network in the United States. Be sure to set the bill to pay each month when you are sure adequate funds are available in your account.  Online bill payment is another quick, convenient way to pay bills. Jarrettsville Federal Community Bank has an online bill pay platform referred to as Move Money which is very user friendly, quick and totally free.

3. Request a Free Copy of Your Credit Report

Get a copy of your report from the three major credit bureaus and review them for inaccuracies.  Determine if there is anything you can do to improve your credit score. Having a strong credit score is one of the most important measures of financial health. It can tell lenders at a glance how responsible your credit use is. The better your score, the easier it is to be approved for new loans or new lines of credit. It can also open doors to the lowest available interest rates when borrowing money.

Someone with a good credit score can get better rates on mortgages, auto loans, and anything that involves financing. So a strong credit score can save most people hundreds of thousands of dollars over the course of their lifetime. An individual with a good credit rating is considered a low risk borrower. They may receive better rates, fees, and perks from banks when applying for loans and financing. Poor credit scores can affect an individual’s ability to rent housing, rent a car, and even get life insurance.

4. Establish a Savings Account and Add to It Each Month

Opening a savings account with your bank and regularly contributing to it is one of the best things you can do for your future. Set up automatic savings because when you automate your savings, there is no forgetting and it is harder to make excuses. Automate the amount you want to come out of your checking account each week or month and have it go straight into your savings account. Money in a savings account typically grows as a result of compound interest. With compound interest, you earn interest on the money you put into the account and on the interest, you’ve already earned. Depending on your bank, your interest may compound daily, monthly, quarterly, or annually.

5. Review Your Insurance Policies

It is important to examine your policies periodically to make sure you are not overpaying.  Whether you have rental, vehicle, or home insurance policies, they all may need adjustments throughout your lifetime. Take a close look at the deductibles. This is the amount the policyholder pays before insurance kicks in. Sometimes it makes sense to lower or raise the deductible amount. It is also important to compare rates to ensure you are paying a fair rate for your policies. Policies are not all priced the same and average rates can change over time.

6. Track Your Goals

A crucial part of financial planning is taking note of when you have achieved your goals and then setting new goals to tackle. Start a list of all of your goals and track them. Make notes at the end of each month. Did you meet your goals?  If not, why? Write down the factors that kept you from success. Be sure to also celebrate your successes as well.

Acknowledgment of your financial situation and taking steps towards a better financial future are critical in becoming a happier, more financially confident individual.  Your financial future is in your hands, so be proactive and plan.

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 153-year tradition of community banking helped us to grow. Today, we continue to thrive, with checking, savings and loan products that meet our customer’s needs, technology that brings us into the future, and community service that gives back to our customers.

Our efficient team of 13 staff members has over 300 years of combined experience in banking, finance, investments, and customer service.  Let us help you work towards your financial goals! For more information contact us at 410-692-5151 or visit our website at https://www.jarrettsvillefederal.com.