Posted on Aug 30, 2021
With summer winding down, schools back in session, and the crispness of fall approaching, it creates a feeling of starting fresh and encourages us to set new goals. Setting new financial goals should be on the top of our lists. As you reflect on the past year, which was unlike any other due to the pandemic, determine what worked and what didn’t work. This will help to shape your money habits for the duration of 2021 and beyond. Here are some tips to consider as you set your financial goals.
New Savings Account
Think about what you want to save for and commit to opening a savings account to reach that goal, whether it’s creating an emergency fund or setting money aside for your child’s future college tuition. There are many types of savings accounts available to save for both short-term and long-term goals.
Tip: Decide on the type of savings account that will meet your goal and commit to depositing a set amount on a regular basis to get into the habit of saving. For example, if you open a basic savings account, deposit $25 every month. You can also sign up for direct deposit or automatic withdrawals from your checking account to ensure that amount is saved. Once you’re comfortable with saving a small amount consistently, you can increase it.
Pay Down That Old Debt
Confronting your debt and thinking about how to pay it off can be scary and overwhelming. Make a list of your debts, noting the monthly payment amount, current balance, and interest rate. Then, make a plan to start paying down the debts. Many experts recommend focusing on either debts with the highest interest rates or debts with the lowest balances to pay off. While you will likely save more money paying off debts with the highest interest rates, it may be faster to pay off the smallest balances first, and seeing this progress may help keep you motivated.
Tip: Whichever method you choose for paying down debt, start by adding a small amount to one of your current payments. For instance, if you are focusing on paying off a credit card with a minimum monthly payment of $100, add $25 to that amount to start for a total monthly payment of $125. Once you are comfortable with that new amount, add more when you are able and stay focused on the goal.
Keeping your finances organized will help you control your money and achieve your financial goals. Some basic tasks include making a budget, tracking your spending, and putting a system in place to ensure you pay your bills on time every month. Be sure to monitor your credit card and bank statements for any unexpected fees or unusual activity too. The sooner you find mistakes or unauthorized transactions, the easier it is to correct those issues.
Tip: Like dealing with debt, organizing your finances can be overwhelming, so start small by picking one organizational task and focus on that task for one month before adding another. For example, you might start by setting up automatic bill pay from your bank account in order to make sure your bills are paid on time. Give yourself one month to learn about it, set it up, and get comfortable using it. Next month, focus on creating a budget, which gives you several weeks to learn about budgeting and working on it.
With the fall season quickly approaching followed by the busy holiday season, make it a priority in the coming month to set a few attainable financial goals to focus on through year-end to be ready to hit the ground running in the New Year.