5 Financial Tips to Start 2021!
Have you set your financial goals for 2021? The start of a new year is the perfect time to get your finances organized and create a plan for your economic future. Whether you’re ready to pay down debt, start an emergency savings fund, or begin planning for your next big purchase, the 5 tips below will help you achieve all your monetary resolutions:
Create SMART Goals
The SMART model is a method to define proper goals for yourself:
Specific – Know exactly what you are aiming for, and how you’ll get there
Measurable – Enable yourself to track your progress, and ensure you’re on schedule
Attainable – Your goal should be something you can achieve with confidence, but not cause you to be overwhelmed
Relevant – When brainstorming, take careful consideration which objectives will help you reach your goal
Time Sensitive – Adding a deadline to your goal creates a sense of healthy pressure to succeed
As an example, “I would like to buy a house soon” is a goal but may be too vague. “I want to save $5,000 to put toward a down payment on a home by the end of the year” is a much more specific goal that is measurable and has a deadline.
Consider the 52-Week Savings Challenge
This method of savings allows you to get into the swing of saving, without a brand-new strict regimen! In the first week of the year, simply move one extra dollar to your savings account. The second week of the year move two dollars to that same savings account. Continue this all the way through the end of the year, and finish with moving $52 into your savings the final week.
Using this method each week will build up a total of $1,378 at the end of the year!
- Create a free Special Purpose Savings account specifically for your 52 Week Challenge funds so you’re not tempted to touch it until you finish.
- If adding the larger amounts during the final weeks of the year concerns you, try it in reverse! Start with $52 the first week of the year, and work toward $1 in the final week.
- For additional information, view the Maine Credit Union League’s article here.
Make it Automatic
Set it and forget it! Setting yourself up for automatic payments, savings deposits, and transfers creates an easy way to reach your financial goals and eliminates missed payments or late fees on your recurring bills.
- BillPay is a free tool that allows you to pay bills from anywhere on your computer or mobile device. It helps you to stay on time with payments, keeps you organized, and you can even use it on your Alexa-enabled device!
- Using Midcoast Connection, you can automatically schedule transfers from your Checking Account to your Savings Account so you never miss a step.
- Enroll in eStatements and receive the same content as your paper statement in a digital format - they’re safe, secure, and reduce your dependence on paper!
Learn About and Monitor Your Credit Score
When it comes to borrowing money for purchases such as a new car, a new house, or when applying for a credit card, knowing your credit score is the first step in the process. This information tells a lender how likely you are to repay the money you borrow. Understanding this information and working towards improving your credit score leads to lower interest rates, and lower payments!
Looking for ways to better understand and monitor your score? SavvyMoney is a free service that provides anytime access to your credit score and report, monitoring, notification alerts, and more!
Plan / Re-plan for your Retirement
When was the last time you checked in on your retirement savings plan? Are you at your maximum contribution? Enrollment in employer funded retirement plans, such as a 401(k), often happens early in employment, which makes it easy to forget about or lose track of the status of those funds. Be sure to revisit these accounts periodically to determine that you are at your optimal contribution amount, and that you are still on course to be financially secure in your retirement years.
Haven’t started saving yet? Ask your employer if they offer a retirement savings plan, and look into the advantages of Midcoast’s Traditional & Roth IRA Accounts to help plan for your future!
As you begin to organize and start your savings plan for 2021, double check that your account and contact information is up to date. Audit your address, phone and email information on all your financial and credit card accounts.
We're here to help you get started - Contact us!