Top 5 Financial New Year’s Resolutions and how Wood & Huston Bank can help you!
The start of a new year often means resolving to do better on finances. In fact, this year, a good 80% of Americans are making money-related resolutions that can change their lives for the better. So if this is one of your New Year’s resolutions, we can help!
Here are the top five financial matters U.S. adults want to get ahead of next year, along with the percentage of folks who are resolving to tackle them, as compiled by Principal Financial:
Save more money each month (40%)
Pay off credit card debt (32%)
Reduce spending (31%)
Sock away more for retirement (27%)
Build an emergency fund (21%)
These are some pretty critical goals and the sooner we all get ahead of them, the more we stand to gain.
Save More Money – NEW Budgeting Tool Available: Log into your online or mobile banking NOW
One thing that often stops us from saving more money is that we don’t have a clear sense of where our hard-earned paychecks end up going. That’s precisely why you need a budget. Without a budget, you’ll have no accurate way of tracking your spending and identifying ways to cut corners. With your NEW WHB Budgeting Tool – Money Management, inside your online and mobile banking, creating a budget is easy. You can play around with different expense categories, create your budget and free up more money to save.
If you’re carrying a balance on your credit card, you’re not alone. Credit card debt recently reached an all-time high in the U.S., with the average balance close to $16,000. The problem, of course, is that for every day you carry a balance, you end up accumulating high credit card interest charges that, over time, can end up surpassing the amount you borrowed in the first place.
If you’re serious about paying off your credit card debt, then you’ll first need the budget we just talked about to see where you’re wasting money and where there’s room for you to apply extra money to your payment each month. You might also consider joining the 44 million Americans and getting a part-time job. Working a second job is a great way to gain extra cash and get rid of debt sooner.
Want to know how long it is going to take you to pay off that credit card debt? Find out now.
If you’re serious about cutting your spending, then you’ll need an accurate budget that’ll show you what wiggle room you have. From there, it’s really a matter of deciding what you are and aren’t willing to give up, and making the right changes.
If you are currently spending $100 a month on leisure activities, and another $100 dining out, and your goal is to cut your monthly spending by $100, then you might look at those two categories and decide which makes you happier, getting to attend events or not having to cook. You might decide to stop paying for that gym membership, and instead continue going out with friends. The choice is yours, but the key is to make enough change that it impacts your finances for the better. Take a look at your spending now with your new budgeting tool by logging in to your online or mobile banking.
Saving for Retirement
Did you know that roughly one-third of Americans have absolutely no retirement savings? Without independent savings, you’ll have no way of keeping up with your living costs once you stop working (Social Security will, its estimated, provide only half the income you need as a senior.) That’s why it’s critical to build that nest egg during your working years and the sooner you start, the more time you’ll give your money to grow.
In 2018, workers under 50 will be allowed to contribute up to $5,500 to an IRA in addition to their company 401(k) plan. Those 50 and over, meanwhile, get a catch-up provision that raises the limit to $6,500. There are phase out limits for Roth IRAs at certain modified AGI levels.
Even if you can’t max out, if you save consistently throughout your career and invest your money wisely, you stand to establish a nice nest egg in time for retirement. Case in point: Stocking away just $300 a month for 30 years will leave you with an ending savings balance of about $285,000 if your investments generate a fairly conservative 6% average annual return during that time. Set aside $500 a month, and all other things being equal, you’ll wind up with $474,000 in retirement cash. Contact a member of our Wealth Management team today (855) 466-7768.
Establishing Your Emergency Fund
Most Americans are not prepared to deal with a true financial emergency. An estimated 57% of U.S. adults have less than $1,000 in savings, while 39% have no savings at all. A solid emergency fund should contain enough money to cover at least three months’ worth of living expenses, and ideally more like six months’ worth.
If your emergency fund is low or nonexistent, then building some cash reserves should come before funding your retirement or paying off credit card debt. If small changes in your budget don’t do much to help you boost your short-term savings, then you may need to consider eliminating some expenses. Establishing an emergency fund is one resolution you don’t want to botch, because without a solid safety net, you risk negative financial consequences, the minute an unplanned expense comes your way. Saving money is easy with our SmartSavings account. Click to learn more today!
Want 2018 to be your year? If you commit to any of the above in 2018 and stick to them, you’ll be in a much stronger financial position by the time 2018 come to an end.