5 Ways to Financially Thrive in the New Year

The time for “New year, new me” resolutions is here, and we’ve got five (actually attainable) resolutions that you’ll want to keep up with all year long. Read on to find out five ways to make 2021 a financially great year.

Learn a new (financial) language. Does listening to financial talk sometimes feel like hearing a foreign language? Instead of simply nodding along, make a resolution to improve your financial literacy this year. Finally learn the ins-and-outs of money management. There are plenty of resources online that can help you decode the definitions behind personal finance terms. You can even make a Quizlet to help you commit the terminology to memory! If you’re worried about finding the time to teach yourself this new language, try incorporating some financial podcasts into your weekly routine. By listening to financial podcasts, you can improve your finance skills while still going about your daily tasks. It’s a great way to get stuff done and get a better idea of what is going on in your wallet and bank account.

Clear out the clutter. Recurring payments can be a great time saver, but they can also get out of hand very easily. Sit down and comb through your recurring payments so you can know exactly where your money is going and when it’s being taken. Take an especially close look at your monthly subscriptions. How many television streaming services are you subscribed to? Music streaming services? There are countless entertainment streaming platforms out there, but you don’t need to subscribe to all of them. Make a list of your entertainment subscriptions and figure out which ones you actually use and which ones are just cluttering up your monthly or annual payments. This applies to paid store memberships, too — if you don’t shop at that discount warehouse much anymore, don’t forget to cancel the membership card before you get charged for the new year’s renewal!

Get creative. Don’t let yourself feel trapped by the status-quo of savings, there are many ways to get creative with your finances. Need some extra money for tighter areas in your budget but don’t know how where to get it? Look into refinancing your existing Auto Loan from another lender with us! With our low rates, your monthly payment will be more manageable, which means you’ll have more money in your pocket, ready to put to good use.*

Making the switch from a high-interest rate credit card to one of our lower-rate cards could also decrease the amount of money you’re spending per term, freeing up funds to put elsewhere.** There are so many avenues you can take to save money. Get in touch with our Loan Department, and we’ll help you get creative in finding them!

Take up a new (money-saving) hobby. Trying a new hobby can help improve one’s mood and daily motivation, but don’t forget that it could also help your wallet! Want to try improving your culinary skills? Great! Ditch the costly take-out meals and door deliveries, and resolve to cook meals at home. Halting the high delivery costs, taxes, and tips (or gas money for drive-thru and pick-up options) will drastically cut down your monthly expenses, giving you more money to spare. You could also pick up a new hobby that could help increase your income. The internet has given us a wealth of resources when it comes to finding freelance work. Skilled at editing? Explore the world of freelance editing for supplemental income. Got an artistic side? Look into starting up an online shop to sell your handmade goods on sites like Etsy or Facebook Marketplace. The options are exciting and endless (and will provide you with some supplemental income)!

Plan it out! Most people shudder at the word “budget.” It’s never fun to sit down and decide what you can’t spend money on. Instead, why not give yourself the freedom to choose what you can spend money on? This tactic for approaching money management is called a “spending plan,” and it’s a lot less intimidating than a budget. A spending plan gives you a lot more flexibility in your finances while still keeping you focused on covering your monthly essentials.

The process of determining your “non-negotiable” expenses is mainly the same as a budget: you have rent, electric, water, internet, groceries, emergency funds, etc. The difference begins when you determine your flexible categories. For example, entertainment, personal shopping, dining out, date nights, and more. A spending plan gives you the freedom to set ballpark amounts for these categories without restricting you too harshly. As long as you have your monthly non-negotiables covered, how you distribute money from month to month in your other categories doesn’t matter as much. A budget is far more restrictive, which can put you in a panicked mindset of “money is always tight, I have no wiggle room,” whereas, a spending plan gives you the control to say “I have the room to spend a little extra here this month.” Start 2021 establishing a spending plan and giving yourself the freedom to choose where your money should go and how you want to spend it!

*APR = Annual Percentage Rate. Not all applicants will qualify, subject to credit approval. Additional terms & conditions may apply. Actual rate may vary based on credit worthiness and term. A First Financial membership is required to obtain a First Financial auto loan and is available to anyone who lives, works, worships, volunteers or attends school in Monmouth or Ocean Counties. See credit union for details. A $5 deposit in a base savings account is required for credit union membership prior to opening any other account/loan. First Financial FCU maintains the right to not extend credit, after you respond, if we determine you do not meet our guidelines for creditworthiness. Current loans financed with First Financial FCU are not eligible for review or refinance.

**APR varies up to 18% when you open your account based on your credit worthiness. These APRs are for purchases, balance transfers, and cash advances and will vary with the market based on the Prime Rate. Subject to credit approval. Rates quoted assume excellent borrower credit history. Your actual APR may vary based on your state of residence, approved loan amount, applicable discounts and your credit history. No Annual Fees. Other fees that apply: Cash advance fee of 1% of advance ($5 minimum and $25 maximum), Late Payment Fee of up to $25, Foreign Transaction Fee of 1% plus foreign exchange rate of transaction amount, $5 Card Replacement Fee, and Returned Payment Fee of up to $25. A First Financial membership is required to obtain a VISA Credit Card and is available to anyone who lives, works, worships, volunteers, or attends school in Monmouth or Ocean Counties.

The Latte Factor: One Way to Get Your Finances on Track in 2021

How often do you find yourself saying, “I can’t afford that!” Whether it’s about an unplanned expense or something that you want to buy. David Bach, author of The Latte Factor, says that’s usually just a lie we tell ourselves.

In his book, The Latte Factor, Bach lays out several key points that can be summed up as: Small amounts of money spent on a regular basis costs us far more than we can imagine.

The Latte Factor came about after a class Bach had taught some years ago. One of his students said she couldn’t afford to save, but she was drinking a latte at the time (and almost every day in his class). He ran the numbers and showed her that if she skipped the latte, she would save $5 a day. What does $5 a day mean to you? Let’s do the math. $5 a day is $150 per month. Would you like to save an extra $150 per month? What’s the value of $150 per month saved in 10 years from now? That’s $1,800 a year saved and $18,000 in 10 years from the Latte Factor alone. Over 25 years, five dollars a day will net you almost $50,000. It’s amazing how such a small difference each day can make a huge impact over time.

As you head into the new year, vow to stop saying “I can’t afford that!” and take a second look at your finances. You don’t have to starve yourself of enjoying everything that life has to offer. Instead, pick one thing you know you spend money on that you might be able to do without. Is it your morning latte, eating out for lunch every day, subscription service, etc.?

If you want to get serious about getting your finances in order this year, here are two recommendations:

  1. Buy The Latte Factor and read about how Zoey turned her morning latte into the words “I CAN afford this.” It’s a quick read and it’s really eye opening!
  2. Take a look at your current debt. Instead of making multiple payments on multiple loans, have you thought about consolidating those payments into one lower monthly payment? You may even get a lower interest rate that will minimize the amount of interest you’re paying.

Apply for a First Financial Consolidation Loan online, or contact us to see if we can help you get started in getting your finances in order this year.*

Happy New Year and Keep Thinking First!

*APR = Annual Percentage Rate. Actual rate will vary based on creditworthiness and loan term. Subject to credit approval. A First Financial Federal Credit Union membership is required to obtain a Personal Loan, and is open to anyone who lives, works, worships, volunteers or attends school in Monmouth or Ocean Counties. A $5 deposit in a base savings account is required for credit union membership prior to opening any other account/loan.

Is this the Year You Keep Your New Year’s Resolution?

Now that the new year is officially here, many of us are coming to grips with a familiar, frustrating truth: there’s a big difference between making a new year’s resolution and keeping one. The good news is that we’re not alone. It’s estimated that approximately 40% of Americans make resolutions when the new year rolls around, but only 8% are successful in keeping them. Making a resolution only takes a moment of inspiration, keeping it calls for consistent dedication.

With the abundance of self-help books, podcasts, and seminars at our disposal, it’s easy to get tossed around on the latest and greatest informational waves. Too often, we jump from one fad to the next, spending substantial energy without moving closer to our end goal. It’s tempting to confuse activity with productivity. That makes it even more important to know the difference between the two. If you want to join the 8% of people who successfully stick to their resolution, you have to work smarter – not harder.

Simplify for Success

By limiting the variables in your resolution’s success equation, you can employ principles similar to those that make life hacks so popular. And while mental tricks and efficiency shortcuts aren’t substitutes for perseverance, they can help you avoid overthinking a problem or wasting time on unproductive practices.

As you work toward your resolutions, focusing on the following three aspects of each goal can help simplify your planning and streamline your pursuit.

1. Psychological

When the American Psychological Association weighs in on new year’s resolutions, it’s a good idea to hear them out. In an article on their website, the APA recommends a sensible approach that involves breaking large goals into smaller, attainable action steps. Following this recommendation increases the opportunities to tally some quick wins, and the psychological benefits of early success are invaluable to long-term achievement.

Example: If you want to build up an emergency fund of $1000, aim for saving $20 a week. It’s not as overwhelming, and over the course of the year, you get 52 chances to celebrate!

2. Physical 

Even if your resolution isn’t physical in nature (i.e. – lose weight, get in shape, run a marathon, etc.), it may be a good idea to incorporate some physical activity anyway. On the Harvard Health Blog, Heidi Goldman shares that exercise can help wire the brain in a way that protects memory and critical thinking skills. Considering the fact that “I forgot” and “I just can’t figure it out” are common excuses for breaking a resolution, improved clarity and brain function sounds pretty helpful.

Example: You resolve that 2018 is the year you finally learn to speak Italian. A 30-minute walk each day offers an excellent opportunity to practice your new vocabulary, and the cardiovascular exercise encourages the growth of new blood vessels in the brain, which can improve your brain’s ability to learn and retain new information.

3. Personal

In a previous post, we discussed the need for accountability. Here’s where the rubber meets the road. Recruiting someone to hold you accountable makes the resolution a little more personal because it involves a risk of social capital. The key is finding someone who knows you well enough to challenge you, but cares for you enough to encourage you as well.

Example: Let’s say you resolve to pay off credit card debt this year and you ask your best friend to hold you accountable. When you pull out a credit card to pay for dinner, your friend can offer a good-natured reminder that putting your meal on credit isn’t helping you reach your goal—the kind of reminder you’d easily brush off if it came from a stranger.

Just because the concept of keeping a new year’s resolution is simple doesn’t mean the process is easy. But if something mattered enough to inspire a resolution in the first place, it’s important enough work towards throughout the year. If you stick with it, you’ll probably find that the satisfaction that comes from accomplishing a goal is often more rewarding than reaching the goal itself.

 

The New Year’s Here: Make Better Resolutions This Year

 

From starting a workout plan to saving for retirement, roughly 80% of New Year’s resolution fail within the first month. Of the people who keep their commitments through February and beyond, only 8% ultimately reach their goal. Why is that? If you ask 100 people, you’re likely to get 100 different excuses reasons. Making a resolution is easy. Sticking to it? That’s a different story.

But instead of focusing on the failure, let’s look at some ways to increase your chances of success in the new year. Compiling an exhaustive list of what it takes to accomplish your goals would be…well, exhausting. So, to keep you from getting overwhelmed, we’ve narrowed it down to 5 simple suggestions that should help you start the new year strong.

Ways to Make Your New Year’s Resolution Stick

Be real.

If you want to get in better shape but haven’t exercised in years, walking for 20 minutes a day makes far more sense than running a marathon in March. If you want to have 3-6 months of living expenses in an emergency fund but haven’t saved a penny over the last year, start with setting aside $20 per paycheck. Realistic goals pave the way for quick wins and consistent progress.

Be specific.

When it comes to setting goals, it’s tempting to speak in generalizations. “I want to feel better.” “I want to be smarter with my money.” The danger of statements like these is that they can’t be measured. Being smart with money is tough to quantify. Paying an extra $50 toward credit card debt is much easier to track. Instead of playing it safe with general statements, dig into the details.

Be consistent.

If you’ve ever run a 5K or 10K, you’ve seen THAT person—you know the one. They’re toeing the starting line, psyching themselves up, trembling with anticipation. As soon as the starting gun fires, they launch from the gate at top speed. You probably passed them after a mile or two, right? As you make your resolutions for the new year, don’t be THAT person. Understand that lasting success isn’t a sprint. Identify your goal, break it down into smaller action steps, and take clear, consistent action toward accomplishing those steps every single day.

Be accountable.

If nobody else knows about them, our best intentions can be our worst enemy. It’s easy to say you want to save $100 each month. It’s also easy to rationalize why you missed a month or two. To keep from fooling yourself, ask a trusted friend, family member, or co-worker to check in and keep you accountable. If there’s one thing worse than missing a goal, it’s having to admit it to someone else.

Be cool.

While January 1st seems like a logical time to make a fresh start, let’s not forget that technically it’s just another day. In reality, every day offers the chance to correct mistakes and build on successes. When making your resolutions, allow for some flexibility. Overly restrictive deadlines and constraints can lead to crippling discouragement. The end goal is improvement, not perfection. So yes, set your goals. But don’t forget to leave yourself some room to enjoy the process of achieving them.

Happy New Year!

7 Money Questions to Ask Yourself in the New Year

 

personal-finance

Will you make financial resolutions for 2016? If so, you’re not alone. According to a study done by Fidelity Investments, financial resolutions are the most popular kind of new year self-improvement. Not only that, but they’re also the most successful, with 29% of people surveyed reaching their financial goals and 74% getting halfway there. Compared to the 12% success rate for resolutions concerning health and fitness, planning to get your finances in order seems like the way to go this year!

You don’t want to just make resolutions, though — you want to be part of the 29% that stick with them all the way through the year. To set yourself up for financial success in 2016, you first need to understand your relationship with your finances.

1. What are your financial goals for the year?
A new year often means new goals and milestones in your life, and your financial plan needs to change to keep up with those. Maybe last year you were saving for a trip abroad, but this year you are saving for a down payment on a house. Or maybe you’re edging closer to retirement and need to start saving more aggressively.

Don’t be vague when identifying these goals. A concrete milestone, such as “I want to add $6,000 to my emergency fund” is going to keep you motivated a lot longer than a vague one like, “I want to save money.” Once you know what your financial goals are, you’ll be able to come up with a spending and budgeting plan for how to reach them.

2. What are your personal priorities for 2016?
Factors other than financial goals should influence your budget, too. Is it important to you to spend time with friends on a weekly basis? Add a “fun” line in your budget for activities like eating out, movies, and weekend activities. Do you want to support the arts in your community? Set aside money for a seasonal subscription to a local theatre or orchestra. Do you have specific causes that you care about? Budget a monthly allowance for donations or charity.

When it comes to finances, it’s easy to fall into the trap of letting your financial goals determine your spending. But life is more than just retirement and mortgages. Give yourself permission to let your personal priorities influence your spending decisions, too. You’ll be happier, more satisfied with your financial life, and better able to stick to the budget you set.

3. Where did you slip last year?
The new year is an excellent time to take stock of what did and didn’t work in the past year — that includes where you didn’t quite follow your budget. Did you eat out more than you should have in 2015? Not save as much for retirement as you wanted? Impulse shop too frequently?

You can’t improve in 2016 until you know where you went wrong the year before. Take some time to look at your spending from the last twelve months and identify the area where you slipped up. The make a plan for how to avoid those mistakes this year. You may need to automate the money that goes into your savings and retirement accounts. You may need to exercise a little more restraint in your spending. Whatever the solution, it will be easier to put into practice once you know what the problems are.

4. What are your mandatory expenses?
Once you know your goals, priorities, and weak spots, it’s time to begin setting up your budget. Start by identifying the living expenses that you must pay every month. These will include your rent or mortgage, insurance bills, utilities, and any debt payments. Budget for these expenses first, subtracting their total from your monthly income after taxes. Whatever is leftover is what you have available for variable expenses.

5. How much can you save each month?
Once you’ve determined how much to set aside for mandatory expenses, it’s time to look at savings. Savings can include long-term goals, like retirement, or short term goals, like a vacation. Identify everything that you want to save for this year, then order them in terms of urgency.

Some goals, like retirement, you should save for every month. Other things, like travel or large expenses, can be saved for one at a time. Once you’ve met one savings goal, you can move on to the next one. When you decide what you’d like to contribute to each goal, the best way to stay on track is to make saving non-optional. Set up an automatic transfer, either from your paycheck or your checking account, to put the money directly into savings as soon as it lands in your bank account. You won’t risk spending it accidentally, and you will ensure that you make monthly contributions towards your savings.

6. What are your spending triggers?
A lot of financial management is about cutting spending — reducing your insurance bill, avoiding credit card interest, eating out less. But all the small cuts in the world won’t help if you don’t know your spending triggers.

Spending triggers are those moments or circumstances that make you pull out your credit card and break the rules of your budget, even when you have the best of intentions. If you want to cut your spending, take some time to identify these triggers and come up with a plan to eliminate them.

If you can’t resist a coupon code when it shows up in your inbox, then you should unsubscribe from promotional emails. If you always want to eat out when you’re stressed, create a new, free routine for unwinding after a hard day at the office. Do you always spend more when you go shopping with a certain friend? Come up with other activities the two of you can do together and leave your credit card at home when you go out. Once you’ve identified your spending triggers and come up with ways to avoid them, you’ll have a much easier time sticking to your budget.

7. Where does your budget have wiggle room?
Managing your finances is awesome, and cutting down your spending to save more is a great goal. But if you are on a strict budget all the time, with no room for any lapses or fun purchases, you risk getting “budget burnout” and slipping back into old, bad habits.

To avoid that, identify the places where you can cut yourself some slack. Maybe you’re giving up eating out but can still treat yourself to a latte once or twice a week. Maybe you’re giving up cable, but you and your roommate can split a Netflix subscription. Allow yourself a few inexpensive extras and sticking to your larger financial goals will feel much less stifling.

Finally, wiggle room also means planning for the unexpected. It may seem smart to put every extra penny into savings and retirement, but what happens when your car breaks down and you don’t have any money for the repair? Leave a little wiggle room for surprise expenses, and you won’t just start a budget, you’ll stick with it.

The beginning of a new year is the perfect time to get your finances in order. Be honest and realistic with yourself as you put together your plan for 2016, and you’ll find yourself on your way to sustainable financial success!

*Original article source courtesy of the Huffington Post.