Thursday, November 23

Three New Year Resolutions to Enhance Your Financial Well-Being

Have you made any resolutions for the new year? Typical January goals include ways to enhance your physical well-being, such as losing weight, getting in shape, or eating a more healthful diet. I'd like to recommend setting three goals for the new year that can enhance your financial well-being.

1. Take Steps to Protect Your Personal and Financial Privacy

Frequent security breaches of company databases containing personal and financial information may be a fact of life these days. Just because those breaches are beyond your control, however, is no reason to relax your vigilance. The first line of defense still starts with you:

  • Check all your financial accounts regularly. Promptly report any errors, withdrawals, or charges you did not make.

  • Create strong, separate passwords for each online account you have. This includes not just financial accounts, but social networks, organizations and websites that collect personal data and/or use passwords.

  • Beware of using public Internet access (wi-fi, hotspots) to access financial accounts or sites that use personal data.

You'll find many resources to help you take these steps and more in our privacy section.

3 Financial Resolutions

  1. Take steps to protect your personal and financial privacy.
  2. Emphasize saving in this year.
  3. Comparison shop before making major purchases—including comparing financing options.

2. Emphasize Saving in This Year

Regularly saving money can help you achieve several important goals that contribute to financial security.

  • Provide a safety net and guard against unexpected expenses by saving an emergency fund of at least 3 months' living expenses. Using direct deposit to contribute monthly to a Educators savings account can help you build an accessible emergency fund that earns competitive interest rates.

  • Save for major purchases. If you are buying a major appliance, a new vehicle, or a new home, having cash for a down payment lowers the amount you must borrow and thus the overall interest you have to pay. If you are able to save the total cost of a purchase such as a new refrigerator or television, you can avoid debt and the cost of borrowing money entirely.

  • Provide for adequate retirement income. Taking advantage of matched contributions in an employer-sponsored savings plan such as a 401K can help you save even more. Also explore such options as regular and Roth IRAs offered by your credit union.

3. Comparison Shop Before Making Major Purchases—Including Comparing Financing Options

Too often, I've seen people spend hours comparing the features and prices of different big screen TVs or new vehicles, for instance, and then sign-up for the store or dealership financing plan without ever comparing the cost of that financing to other options. Buying a TV, refrigerator or similar appliance without comparing the costs of different financing options could cost you hundreds. Buying a new vehicle without comparing different loan options could cost you thousands! The best way to save money is to compare your financing options just are carefully as you compare products. Start your comparison by looking at the credit card and loan options from your credit union.

It's Easy to Take the First Steps Today

Beginning to implement any of these resolutions is easy. The first step is to get more information or tips using the resources I've shared. The second step is to choose which goal you want to tackle first and get started. If you are already actively working on one or more of these goals, consider how you can do more. Take your financial well-being to a new level.

Originally published January 2015.

FoolProof Education

FoolProof Education is a highly interactive, self-grading group of online lessons called "Modules." The Modules teach consumers of all ages about money, financial responsibility and the realities of the free enterprise system.

High School, College & Home School Curriculum

Closely aligned to the Common Core standards and state personal financial literacy requirements.

Educate Yourself, a Friend or Family Member

Choose from a wide variety of topics. Start and stop and continue at anytime.