Now that you’ve decided to get control of your finances, you need to do two things:
- Establish your goals and make sure they are realistic.
- Make the most of the banking tools available to you.
Let’s discuss these:
Your Financial Goals
Aside from taking care of the day-to-day necessities, what do you want to see happen with your money? What are your long-term aspirations? There’s nothing wrong with writing them down. Nor is there anything wrong with having more than one goal. These are some typical financial goals.
Getting out of debt: If you’ve got significant debt, it’s going to be hard to make any other plans for your money. Those interest payments will cost you, and make just about any kind of long-term planning difficult at best.
Having an emergency fund: The Motley Fool reports that 62 percent of those Americans polled do not even have $1,000 in savings. That means that they’ll have to either forgo or borrow to pay any large car or home repair or out-of-pocket medical expense. Putting money aside for emergencies or unforeseeable expenditures is a good way to help keep you out of debt and it also buys peace of mind.
Saving for a home: The more you have saved for your first or next home, the easier the process will be – and it can be done. In 2015, well over a million people bought their first home, so you can do it, too.
Saving for your children’s education: Unless you are lucky enough to live where college is tuition-free, the cost of college is not likely to decrease anytime soon. The days of a student paying for a significant portion of the tuition and fees on the strength of a summer job are long gone. With so many graduates shackled by student debt, it’s a very positive impulse to want to cover some or all of your children’s college costs.
Saving for a new car: As with a house, the more you put down, the lower your monthly payment and shorter the duration of your loan can be. That is, if you really must have a new car. A smarter buy – one that will free up extra money for your other goals – is to buy one that is a year or two old so that someone else bore the burden of the amazing depreciation that befalls the value of most new cars.
Saving for retirement: A very worthy and necessary reason to save is for life after work.
The key to any savings plan is, of course, a budget. It’s the rare person that couldn’t have a better life with a budget in place. When you’re saving for certain goals, keep the following in mind:
Be proactive: Get out in front of your goals by having a certain amount dedicated to them taken out of your paycheck and put in accounts you’ve created for that purpose. If you never see it, you won’t miss it – but you’ll be glad it’s there when the time comes to use it.
Be realistic: Remember that most financial goals are not reached easily or quickly. Know that saving for retirement will take place over the course of your entire career, and that saving for college can be a nearly two-decade process. Set goals that are achievable, otherwise, you’ll grow frustrated with the process and be more inclined to give up.
Be flexible: Know that changing your budget or your goals to meet unexpected occurrences is perfectly OK. Life happens and periodic reviews of your progress is advisable. Just don’t let those occurrences make you give up on your goals.
Know your own habits: For one month, track every penny of your spending so that you know where your money is going. Now you will be ready to create a budget that’s realistic because it’s based on actual data.
Get professional help: There is no prize for doing it all yourself. Make an appointment to meet a money management professional and get their input on your goals. Their knowledge and objectivity will serve you well going forward.
Give yourself a break: Be sure that you leave room in your budget and savings plans for fun. If you don’t, it will feel like you’ve locked yourself away in a money-less prison and you’ll be more likely to lose your way. Be sure to budget a realistic amount for niceties of life like dinners out, movies, sporting events or family trips.
Your Online Banking Tools
And to track all this money you’ll be putting aside for yourself; Amplify Credit Union has available a host of online tools.
Set up different accounts: Don’t make the mistake of housing all your money in one place. Compartmentalize your assets so that monies earmarked for different purposes are not blended and easily confused. This way, your household account won’t be lumped in with money you are saving for retirement.
Set up auto transfers to automate your savings: Auto transfers will funnel money directly into your savings accounts set up to meet your financial goals. This gets the money out of the more active checking or savings accounts and into accounts with longer-term earning potential.
Use alerts to help: Amplify offers a host of alerts designed to keep you up to date on what is happening with your accounts. You can keep yourself fully informed about cleared checks, debit card transactions, loan payment due dates, automatic withdrawals and certificate maturity dates.
Use your online banking tools to review your progress: Your tools also make it easy to keep an eye on how well your savings journey is progressing. You can choose to receive updates as frequently as you like.
Amplify Is Here to Help
We want your financial life to be as great as you want it to be and we’re here to make that reality. Come talk to us about planning strategies that are proven to work and be sure to make full use of our online banking features we offer.