New Year, New You!

New Year, new you!  How many times have we heard it – or even said it ourselves? I know I sure have! “It is a brand-new year and I am resolving to be a brand new me!” The best way to make the infamous “new you” happen is to take some easy steps – especially in your financial planning.

Did you know that according to “Fidelity Investments Survey” nearly one-third of Americans plan to make a money resolution for each new year? Approximately 48 percent plan to save more, 29 percent aim to pay down their debt and 15 percent have excellent intention to spend less.  

If you look at these top three goals, you will see that one affects the rest. If you resolve to save, then you will spend less and in-turn have the ability to pay down your debt. So, how do we get this ripple effect going? 

A great way to get these financials goals started is to track your spending first, and then follow it up by creating a budget. I say the “b” word a lot, but it truly is the avenue to financial greatness! It is so easy to track spending and budget these days, too – there are numerous apps and software programs. Choose one that fits your lifestyle best and run with it. Tracking your spending helps you see where exactly you may be going over your budget. 

Once you see the leaks in your spending, identify what is really a necessity and what you can live without – that’s right, this is where you will start to attack the resolution of spending less. Do you really need to pay that monthly gym membership fee or can you save that money and make a one-time purchase for weights and then jog in the park? Is it really necessary to eat out at lunch every day or can you start bringing your lunch three days a week? 

Make saving fun and challenge yourself to have “no spend days” or “no spend weekends”. What is that, you ask? These are days or weekends where no money leaves your bank account. Find recipes to make at home, skip the shopping mall, and look for avenues of free entertainment. You’ll be surprised, at the end of the day or weekend, to see just how much you saved up! Believe it or not, this is very motivating to save more and do more to SEE more in your checking and savings accounts!

So, let’s skip ahead to … April or May of 2020. You’ve been budgeting and saving and you see that surplus in your account – what now? Take a good look at your debt. What has the highest interest that needs to be paid off? Do you have a credit card with a high balance, that perhaps you’ve only been paying the minimum balance? Start doubling (or even just sending an additional $50, for example) to pay that card off and be rid of that payment. Then – stop using your credit card(s) altogether and use …. CASH. Yes, real money. 

Studies have shown that using a plastic credit card just doesn’t hurt our wallets as much as it hurts us to use cash. How do we benefit from this little fact? Yes, let’s refer to the “Dave Ramsey” way of the envelope system. Divide up your dollars into daily budget categories – this can be anything from lunch money, groceries, entertainment – anywhere you see that you find it easy to spend. The day you get paid, fill those envelopes with money you budgeted for each item – here is the trick, though – once the envelope is empty, you have to stop spending in that category until your next paycheck. It really can be that simple to save money and budget wisely! 

Do we see what has the potential to happen here? You are doing it! You are making leaps and bounds to that “new you” you have been talking about all these years!

Remember, you don’t have to do it alone either. If you need help in any avenue of your financial goals, First Basin is here to help. We offer excellent services such as free checking and savings accounts, plus competitive rates on loans – if you are needing to refinance in any aspect of your life, such as your auto loan or even a personal loan.  

Together we can accomplish your goals! Cheers to 2020!