New Year – New Financial You!
2023 marks a new year… a new start! If 2022 was a rough year for you financially, it may be time to get back to basics and start again. Thankfully, there are small, simple steps we can take that make a big difference in our savings account balances. Check out these 3 simple steps you can take for a 2022 financial re-start.
Pay Off Debt:
Pay a little extra each month – One of the fastest ways to pay off debt is to pay a little extra every month. When creating your budget, find places where you can move money toward your debt. Every little bit counts! You can also “snowball” your debt payments. This means you focus on one payoff at a time. You would pay your normal or minimum payment on all of your loans/debts but one. You pour all of your extra money on that debt payment. Once you pay it off, you move to the next one. And soon, you will have them all paid off.
Consolidate debt – Consider moving your debt into one loan that has a lower interest rate. Do you carry high credit card balances? Now is the time to move those high balances to a lower interest card. Many credit unions are offering balance transfer specials right now. Be sure to look at when those special rates expire. Many 0% balance transfers expire after 12 months and revert to a higher rate. Right now, Blue Chip is offering a 3.99% APR* Balance Transfer Special. And the best part… you get to keep 3.99% APR for the lifetime of your balance. Check out all of the details.
Loan Protection Insurance – Do you have a loan and recently lost your job or had a change of income? Be sure to check with your financial institution to see if you have loan protection insurance to help cover that loan while you are unemployed. Loan protection insurance will help keep you out of debt as you move forward. If you currently have a loan with us, consider adding loan protection. We are living in uncertain times. Be protected. Contact our expert loan staff to add loan protection today.
Build Your Emergency Fund:
Now is the time to build up your financial savings. Pay yourself first. Consider putting all funds not being used to pay bills toward your emergency fund! Evaluate other areas you can cut back on expenses… groceries (discount grocery shopping, coupons, eating the food you have), cable and other subscription services. Do you need Netflix, Amazon Prime, Disney Plus and HBO this month? These little cuts to your financial budget can make a big difference. And they don’t have to be a lifetime cut! Considering making these cuts for a short amount of time to build up your savings and then reevaluate your entertainment needs. Check out our past blog post on Holiday Meal Planning for inexpensive meal planning and shopping ideas.
Spending Freeze Challenge:
Maybe we went little overboard at Christmas and need to take a big break from extra spending. A great way to catch up on debt is to take the Spending Freeze Challenge. In a spending freeze challenge, you “freeze” or stop all extra (non-essential) spending for a specific period of time with the goal of saving that extra money.
Start by revisiting your monthly budget to remember exactly how much money you have allocated to each area of spending. There are many areas where you just don’t have a lot of options to change. Your mortgage payment will always be the same amount each month. We really want to focus on the areas where we can control how much extra we are spending… groceries, gas money, dining out and extra personal spending money. Check out the spending freeze challenge and try it for a month! FULL DISCLOSURE: It’s not a lot of fun… but absolutely worth the effort. We saved over $400 in one month!