A New Year is upon us yet again. With it comes the lovely tradition of New Year’s resolutions. You know these ones … I will lose weight, I will get organized, and I will not eat all of my daughter’s gummy snacks. Oh, that last one may just be mine.
Another popular resolution is becoming financially savvy. Either way, it’s one thing to make a resolution, keeping it is another.
“Make the best of what is in your power, and take the rest as it happens.” – Epictetus
I often think of this quote when I think of finances. We have more control than we realize when it comes to our money; it’s just a matter of identifying our habits. So where do we start?
- Be honest with yourself
The first step in anything positive is to be honest with yourself. Ask yourself, “What is my current financial situation? What is my debt-to-income (DTI) ratio?” Be positive! No matter what you find out, you have just started on your way to being financially fit. As a member of Arizona Federal you have access to Money Management through online banking and the mobile app, which has a tool to help you calculate your DTI.
- Where is your money going?
Do you know where your money goes? Most people would say the obvious, “My mortgage, car payments, utilities etc.” What about all the things we don’t pay attention to? For instance, how often do you go out for lunch, buy coffee or go out to dinner? Those things add up, are often the most overlooked, and are usually the easiest to cut back on. Here are some tools that come with your membership and can help you get back on track.
Money Management – This handy tool will actually track your spending! You can even customize it to have certain categories, so you’ll know exactly where your money is going every month.
CardPower™ – Not only can you turn your card on and off right from your mobile device, this nifty little app will actually let you set up spending limits and even place limits on where your card can be used!
It’s like a little digital ninja there to protect you from yourself (and your unwise spending habits).
Mobile App – Our easy-to-navigate app allows you to check your balance and set up alerts in an instant.
- Check your credit
We recommend doing this at least once a year to ensure there are no errors on your report. Did you know that credit can impact employment, utility deposits, loan rates, cellphone companies, etc.? Let’s take a look at some things you should check today to get on the path to financial success.
Insurance – A positive credit score could mean a lower rate for your insurance policy. That’s extra money for your savings account. You should also be checking in on your insurance policies annually to make sure
you’re getting the best rate and have the coverage you need.
Credit Cards – Your credit score is a big factor in determining your interest rate. Ask your credit card issuers if you qualify for a lower rate. After you do this, commit to paying down your balances by starting on the higher-interest-rate cards first. Once you’ve made it to a zero balance, celebrate by doing a happy dance (not spending more money)!
Remember, included with your membership you have access to IDProtect™, which allows you to view your credit report and score every 90 days at no charge. Log in to online banking at ArizonaFederal.org and click the “Member Benefits” tab for details.
- Start an emergency fund
Whether we want to admit it or not, life happens. Just like Epictetus alluded to, we have to make the best use of our power and react to the rest as it happens. We have the power to be proactive in our approach by starting an emergency fund with three to six months’ worth of expenses (not income!). We are not immune to the bad things that can happen, like loss of a job, an illness, etc. Make a smart choice for you and your family and start saving now – and leave the money alone unless it’s a true emergency.
- Have “The Talk”
The more people I meet, the more I find that talking about your finances seems to have become a social taboo. Don’t let this happen to you. I’m not saying to spout off all of your financial mishaps, but have a conversation with your spouse, significant other or a friend. Talk about what your personal goals are (for now and the future). Chances are you will encounter a friend or loved one who may have experienced a similar challenge, and you can find creative ways to support each other. Like many other things, if you enter it with a positive attitude, the chances of a positive outcome are that much greater.
- Write it down
Whether you set reminders on your mobile device or leave a note on your refrigerator door, do what makes sense to remind you why you are trying to achieve your financial goals.
No matter what your goals are, remember you have the power to see them through! Happy New Year!