Jazmin Garcia, Community Relations Officer, San Diego County Credit Union

New Year’s resolutions often come in the form of physical goals and changes but making sure you’re in great financial shape is important as well. Research shows that there is a clear correlation between financial stress and poor physical health, so there’s no better time than now to take control of your finances.

The great thing about financial goals is that they can be anything you want. Financial goals don’t necessarily mean you have to save a certain amount of money, take a lavish vacation, or buy a new car or house. Goals can come in the form of meeting deadlines or creating new habits. When it comes to getting fit and being healthy, it’s important to be financially fit too, and San Diego County Credit Union (SDCCU) is here to help get you started.

1) Create a Plan and Build Your Budget

Think about the goals you have for the New Year, maybe you want to take a vacation, get a new car, become debt free, build an emergency fund or purchase a home. All those goals require money, a plan and a budget in order to attain.

One suggestion is to make sure to build a timeline to track your progress and monthly budget to hold you accountable and make sure you are not overspending. You can even automate a regular transfer to a savings account, use a financial organization app or resort to the old-fashioned method of saving using a piggy bank or the envelope method. Create budget amounts for groceries, entertainment, shopping, eating out, etc.

Additionally, creating a system or spreadsheet to keep track of how much you are spending in each of these categories, including your cost of living and essential needs, is important. Once created, you can then target each spend category and find ways to eliminate or reduce costs. You may notice you’re eating out more often than you realized or spending far more on entertainment than your budget allows. Having a system helps to track, monitor, and alter these items to save more money.

Don’t forget about coupons, price matching and discounts can also be applied to all categories of your budget as well in order to build your savings. Depending on the strategy that works best for you, creating these action items will help you find ways to spend less money and watch your savings add up.

2) Grow Your Emergency Savings

Once you have your plan, a budget and goals established, you can set some focus toward saving for the unexpected. Increasing your savings is always a great idea! Ask your employer about direct deposit options that allow you to transfer a specific amount of your paycheck directly to your savings account automatically. This is a popular savings idea because it is automatic and there are no additional steps you need to take. Start with a small amount like $20 and build from there when you are able.

Another popular idea is to think about the expenses or subscriptions you are currently paying for and evaluate if some of these can be canceled or paused to allow you to allocate that amount toward your savings goals.

Consider what your emergency fund looks like. It is recommended that you have an emergency fund of at least three to six months of non-discretionary expenses, like your mortgage, utilities, car loans and other bills that must be paid each month. If you do not have an emergency fund, create one now. You can start small and grow this fund to help prepare you for any unanticipated expenses that could arise. Contributing toward your savings is great for your long-term goals and financial security which will help eliminate financial stress and steer you toward financial independence.

3) Improve Your Credit and Decrease Debt

Your credit score is like your financial report card. FICO® Scores range from 300-850. Improving your credit and decreasing debt go hand in hand, but one may require more focus than the other depending on your situation. Keep in mind that 35% of your credit score is based on your credit payment history. To help you prioritize, set up automatic payments and always aim to pay off card balances in full if possible. Review your budgets to see if you can reallocate any money to your outstanding balances. For more information check out the blog on how to “Improve Your Credit Score in 4 Easy Steps” and visit our Financial Knowledge Blog to learn more tips on setting up a solid financial future.

SDCCU will begin their Financial Wellness Wednesdays again in 2022, in partnership with the San Diego County Library System. The program offers free financial education webinars for the San Diego community on a variety of topics aimed at improving financial health. More than a dozen different financial wellness webinar topics are offered that include something for every age and stage of life including, but not limited to: 6 Steps to Create a Personal Budget, Understanding Your Spending & Financial Behaviors, Simple Ways to Slash Spending, Teaching Your Teen About Money, The Keys to Homeownership, Rebounding After a Financial Setback, Current Scams and How to Protect Your Finances, Millennial’s Guide to Savings, Elder Financial Abuse Prevention, SDCCU’s Biz Kid$ to help teach kids about money and business and more. Join SDCCU virtually to work out your mind and your budget on Wednesdays from wherever you are!

Whether you are looking to reduce debt, increase your savings or just get your finances in order, SDCCU hopes these best practices help you get started as you work toward creating positive financial resolutions.  Start the change today to live well to encourage and maintain good financial health for you and individuals in your communities, to help foster a healthy and thriving economy. Cheers to setting new financial resolutions!

For more information and to register  for Financial Wellness Wednesdays, visit sdccu.com/fww.