Make a New Year’s Resolution
If you’re still working on your New Year’s resolutions, don’t forget to think about your money. The New Year is a great time to assess your finances, gain control and stick to a new budget or savings plan. Taking control of your personal finances allows you to save and prepare for unexpected expenses. Here are some tips to help you get started:
Get organized. Start 2012 by organizing your financial records and creating a plan to keep your bills and financial statements organized throughout the year.
- Consider treating yourself to a post-holiday gift of a financial organization system. Alphabetized file folders or filing systems specifically for financial organization are available in January as you begin to prepare for tax season.
- Pick up a free ChecKit at Iowa State Bank. If you still like to keep paper copies of your statements, consider getting organized with our free ChecKit – a three-ring binder with monthly dividers to organize all of your important financial papers.
- While you’re getting organized, consider buying a shredder to keep your personal information safe from identity theft.
- Sign up for eStatements with images and you’ll also get electronic notices, too! We’ll give you $10 to get started. Get organized and get $10!
Create a budget. Track your income and expenses to see how much money you have coming in and how much you spend. If you have debt, establishing a budget will help you to pay down your debt while saving.
- Identify how you spend your money.
- Set realistic goals, especially if you plan to cut some of your expenses.
- Use computer software programs or basic budgeting worksheets to help create your budget. Include as much information as you can.
- Track your spending and review your budget often.
Lower your debt. Establish a plan to pay off debts while you save. By paying off – or at least paying down – high-interest credit cards, you’ll save on interest charges that add up quickly over time.
- Make payments on time and, if possible, pay more than the minimum due.
- Pay off debt with higher interest rates first.
- Transfer high-rate debt to credit cards or other loan options with a lower interest rate. Talk with your personal banker about your options.
Save for the unexpected and beyond. Pay yourself first. Saving is important; it will help to ensure a comfortable future that can endure financial surprises.
- If you receive direct deposit at work, ask your employer to send a specific amount to your savings account. Because the money is put into an account before you have a chance to spend it, automatic savings plans are an easy and convenient way to save. If your employer doesn’t offer direct deposit, many banks allow for automatic transfers from checking to savings accounts.
- Save at least 10% of your income for retirement. Enroll in a retirement plan or consider optimizing an established retirement plan. Contribute at least the maximum amount that your employer will match. Contributions made to these types of plans are tax deductible. If your employer does not offer a retirement savings plan, turn to us – we offer Individual Retirement Accounts. IRAs offer tax-deferred growth, meaning you pay taxes on your investment gains when you make withdrawals.
- Financial advisors also recommend keeping about three months’ salary in a savings account in case of financial emergencies such as hospital bills or loss of job.
These tips are provided by the Iowa Bankers Association (IBA), representing banks and thrifts in the state. The IBA serves its members by providing legislative advocacy, training, regulatory compliance and other services designed to enhance the ability of banks to serve their communities. Learn more at www.iowabankers.com.
Copyright © 2012 Iowa Bankers Association.
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