The new year can offer the opportunity for a fresh start in many ways. If you’re struggling financially, it brings a chance to reflect on past mistakes and achieve financial fitness. Here are five steps to ring in the new year with a plan to improve your finances.
1 Set Financial Goals
Your goals for the new year may be to develop a household budget that enables you to tackle debt and build savings for a more secure future. Perhaps it is opening and focusing on a retirement account. Prioritize your goals and focus your attention on those which are most important to you. Whatever your financial objective, goal setting can help you achieve it. Put your goals in writing so you can revisit and evaluate if you are meeting your objectives in a focused and timely manner. Be specific and realistic. You want your goals to be attainable.
Include dates for reaching those goals to keep you on track. Some may be short-term goals, such as starting an emergency fund. Others may be long-term, such as saving for your child’s education. Adjust the dates as you go if necessary. Financial goal setting can help you achieve financial fitness faster.
2 Draft a Budget
Once you set your goals, developing a budget can help you achieve those goals. Review your income and expenses. How can you find the funds to help you reach your objectives? If you cut down on spending, will it give you the ability to pay down debt? If that’s a priority for you, the key is finding a way to budget to accomplish it. If your budget is tight and extra funds are minimal, there may be other ways you can achieve a debt reduction goal. A low-interest rate Benchmark FCU VISA balance transfer credit card might be an option for consolidating debt. It will help you to save on interest and enable you to focus all your funds on paying down the principal for a period of time.
3 Prioritize Saving for Financial Fitness
Saving in any form can help you get your finances in better order. Best of all, it’s something that’s totally in your control. Decide how much you can comfortably save each month based on your budget and then commit to doing it. Automating your savings can make it even easier. If the money is deposited directly into a savings or retirement account, you won’t be tempted to spend it. Building emergency savings or building your retirement savings are both great ways to improve your financial fitness. Saving for large ticket items can also help you avoid high-interest credit card debt. Lack of retirement planning or emergency savings can be a big stressor. Avoid that stress by taking a proactive approach to saving. Check out Benchmark’s Ultimate Saver Account. It’s a great way to save for any need.
4 Improve your credit score
Think you have no control over your credit score? You’re wrong. The best way to improve your credit score in 2022 is to pay all of your bills on time each month. Making on-time payments is the biggest factor in maintaining a good credit score. In addition to paying your bills on time. Focus on reducing the amount of debt you owe. Keeping balances low on credit cards and other types of credit can help keep your credit utilization lower which is better for your score. This means paying down debt and then keeping balances low. You can request and check your credit reports from each of the major credit reporting companies. This includes Experian, TransUnion, and Equifax. Check your reports for errors and report any that you find. Get your free credit report once every 12 months from each of the three reporting companies at AnnualCreditReport.com. The best way to build and keep an excellent credit score is by developing better financial habits. Following our financial fitness tips will help with that.
5 Borrow Smarter
If you find the need to borrow, whether it’s to focus on consolidating high-interest debt or for a home improvement project or repair, or even a new home, it’s smart to look for the best interest rates and terms. As we mentioned above, a 0% APR credit card promotion may help you to consolidate balances from higher interest credit cards. The key is to pay down the balance before the 0% promotion ends. This might be anywhere from a few months to a year. Read the fine print when researching balance transfer cards so you know the timeline for the special rate. Tap for details on Benchmark’s 0% APR* Balance Transfer Credit Card. It’s good for purchases and balance transfers for up to 12 months.** Low interest rates and other perks on a Home Equity Loan or HELOC can help you achieve a goal, such as home remodeling, in a much more cost-effective way. It’s all about researching to find the best deal and a lender that you are comfortable with and trust. Credit Unions are a great place to borrow. They have a strong focus on customer service and typically offer higher interest rates on deposits and lower rates on loans. If that’s what matters to you, it’s time to join your local credit union.
Want to learn more about financial fitness? Read our blog “Is refinancing my mortgage a good idea?”
*APR = Annual Percentage Rate. Rate subject to change and based on individual’s credit history. The, ANNUAL PERCENTAGE RATE is subject to change on the first day of the billing cycle annually to reflect any change in the Index and will be determined by the Prime Rate on June 30th of each year as published in The Wall Street Journal “Money Rates” table to which we add a margin.
**0% Intro Rate is valid for purchases & balances transferred from other institutions within 365 days from card opening. The 0% rate will be in effect for up to 12 months from card opening & after the 12 months, the rate on all unpaid balances will convert to the rate member qualified for at card opening. 0% promotional rate is only valid for new VISA Platinum Cards & subject to expire without prior notice.