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Five Steps for Setting 2018 Financial Resolutions

1/17/2018

Every new year, individuals make common promises to eat healthier, exercise more, give up bad habits and establish financial resolutions. While it can be difficult to stay on track, there are simple steps you can take each year to stick with your financial goals.

Five Steps for Setting 2018 Financial Goals

 

Develop a budget

This year, make a resolution to develop and stick to a specific budget. Evaluate your family’s expenses and spending habits for the last few months to identify where you can make changes. To hold yourself accountable, write every purchase down by hand for one month. This financial resolution will help you categorize family spending and determine a realistic budget for the following month.

Grow an emergency savings fund

The ideal emergency savings fund should cover between three and six months’ worth of expenses. As part of your financial resolutions, set aside a portion of each paycheck to prepare you financially for an emergency. Do your best to save as much as you can, even if it’s a small amount.

Save your tax refund for a specific goal

With tax season right around the corner, start thinking now about how you will spend your tax refund. Having a strategy in place will prevent you from running through this windfall. Consider saving the money in an emergency fund, paying off credit card or student loan debt or putting the funds toward an upcoming vacation.

Set up different savings shares

To stay focused on specific savings goals as one of your financial resolutions, set up different savings shares for various expenses within your account. Different shares can be used for a vacation, holiday spending or day care costs. Yearly expenses, including getting new tires, buying new windshield wipers or paying for a car inspection, can be pulled from a specific savings share. Label each share and set up automatic transfers from your paycheck to add to rolling savings accounts. Start with small amounts and be realistic to be consistently successful.

Plan for the future with a 529 plan

The Pennsylvania 529 College Savings Program offers a smart, tax-advantaged way for families to save for college. Whether your child is in diapers or close to high school graduation, save as much money as early as possible to put toward his or her education. Even if you contribute the minimum requirement, invest a little bit each month in the 529 plan.

Focus on the bigger picture to accomplish your financial resolutions in 2018. By having a clear sense of each money goal and why you’re saving, you can successfully keep your New Year’s resolutions this year.

erin_elis

Erin Ellis
Accredited Financial Counselor ®
Philadelphia Federal Credit Union
eellis@PFCU.COM