3 Financial Resolutions To Help Make Your 2021 Successful
December 17, 2020
Making the right resolutions can make all the difference when it comes to improving your financial health. Here are three financial New Year’s resolutions to help you start 2021 off right.
1. Establish and stick to a budget.
Creating a budget makes it much easier to track how much you are spending each month. You can use this process to help you identify where you can reduce costs and then set reachable goals.
One way you can budget is using the 50-30-20 method: spend 50% on necessities, 30% on wants, and save 20% (including paying down debt) of your income.
2. Pay off debt.
If your credit is good, consider consolidating credit card debt to a lower interest rate loan or refinancing your car or home loan. This could save you hundreds of dollars over the term of the loan and cut down your monthly payments.
You can also avalanche your debt by paying extra toward the credit card with the highest interest rate. Then, once it’s paid off, pay more toward the next highest, and so on until your debt is gone.
3. Start and add to your emergency fund.
According to bankrate.com, nearly four in 10 adults would need to borrow money to cover a $1,000 emergency. Having savings set aside helps you cover costs you don’t budget for, like car repairs or medical costs.
It’s a good idea to have three to six months of living expenses saved. Starting with a goal to save each month is a good way to begin. To make it easier, set up automatic transfers of a set amount; maybe you move $25 each payday from your checking to an emergency fund.
To assist in starting an emergency fund, MSUFCU offers its Savings Builder? account to help members establish savings faster by paying higher dividends on initial contributions. This is different from traditional savings accounts that require more deposits to earn the higher rate.
With a new year comes a new opportunity to set resolutions and strategies to make them happen. Consider adding one or all of these three New Year’s financial resolutions to your list in 2021.
Tags: Money Management, Budgeting, Savings