Financial resolutions for the new year

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A financial fresh start: 10 New Year's resolutions for a healthier future

As the new year unfolds, it’s the perfect time to reflect on our financial habits and set goals for a more secure and prosperous future. It can be overwhelming to know where to start, so we've put together a list of ideas for goals that will help to improve your quality of life.

1. Find a budgeting method that works for you

The first step to financial wellness is to find a budgeting method that suits your lifestyle. Whether it's the 50/30/20 rule, zero-based budgeting or an app-based approach, explore various methods to discover the one that resonates with your financial goals and preferences.

2. Set a budget and stick to it

Once you've identified a budgeting method, set a realistic budget for your monthly expenses. Track your spending diligently and make adjustments as needed. Sticking to a budget can help you gain control over your finances and avoid unnecessary debt.

With Southland Digital Banking, tracking your spending is made easy with the budgeting feature that includes transactions and spending. Just don't forget to track your cash payments too!

3. Improve or start building your credit score

Your credit score plays a crucial role in your financial well-being. Check your credit report, address any discrepancies and work on improving your score. Timely payments, responsible credit use and reducing outstanding balances can positively impact your creditworthiness.

To learn more about how you can use your credit card to improve your credit, read our blog here

For those that have yet to start a line of credit or need to improve their score, consider the Southland Visa Smart Card or Smart Card Secured. 

4. Pay off a credit card debt

High-interest credit card debt can be a significant financial burden. Make it a goal to pay off at least one credit card this year. Consider creating a debt repayment plan, utilizing the snowball or the avalanche methods

5. Build your emergency savings

Financial emergencies can happen at any time. Establish or bolster your emergency savings fund to cover three to six months' worth of living expenses. Having a financial safety net provides peace of mind and protection against unexpected setbacks.

It's a good idea to keep your emergency savings in a separate savings account than your other savings, this way you'll have limited withdrawals out of your emergency savings account and your money will stay put. While investing some of your savings is smart, you'll want your emergency savings in an account that is easily accessible with no fees for removing funds. 

To make building your emergency savings that much easier, set up an automatic transfer.

6. Save more with a high-yield account

If you're looking to save more money this year, a high-yield savings, high-yield checking or a certificate account is an easy way to earn more on your money. These accounts typically offer better dividend rates than traditional savings accounts, helping your savings grow more quickly over time.

Try our savings calculator to learn how much you can earn on your savings. 

7. Start investing towards your retirement

Planning for retirement is essential for long-term financial security. Contribute regularly to retirement accounts like a 401(k) or IRA and take advantage of employer-sponsored plans when possible. and consider consulting with a financial advisor to optimize your investment strategy.

If you're not sure how to start saving and investing towards your retirement, read our blog post for a quick introduction, or schedule a free, no obligation consultation with a Southland Investment Advisor

8. Don't purchase things on a whim - try a waiting period

Impulse buying can derail even the most planned-out budget. Try implementing a waiting period before making significant purchases so you have time to evaluate whether the purchase is a necessity or a fleeting desire. Often times you'll find that you completely forget about the item that you so desperately wanted in the moment. 

For example, if your waiting period is one week, and after one week you still can't stop thinking about that item, then you can make the purchase if it fits within your budget. It's also a good idea to have longer waiting periods for items that cost more - this gives you time to do research and price-check to be sure that you're getting a quality item at the best cost if it's truly a necessary purchase.

9. Try a no-spend month

A no-spend month sounds impossible at first, but it's really just a month focused on mindful spending. The point isn't to not spend a single dollar for an entire month, as that's nearly impossible, but rather to eliminate or heavily decrease spending in one non-essential category for one month. 

For example, if you know you impulsively shop for clothing, challenge yourself to not purchase any clothing items for an entire month. You'll be surprised at how much you save and how your spending habits can completely change for the better.

10. Build out your estate plan

Planning for the unexpected is a responsible step towards securing your family's financial future. Create or update your estate plan, including a will, power of attorney and healthcare directives. Consult with legal professionals to ensure your wishes are documented and legally binding.

Southland has partnered with Affinity Trusts to provide our Members with discounted estate planning services. Learn more about our partnership and get started with your plan here

You're on your way to better finances

Starting these financial resolutions may seem daunting, but the long-term benefits are well worth the effort. As you usher in the New Year, commit to taking control of your finances, making informed decisions and setting the stage for a better future. Your financial well-being starts with a single step – so make it count this year!