Start 2024 Off Strong: 5 Ways to Build Better Financial Habits
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Did you know that exercising with another person lowers stress by 26 percent and significantly improves quality of life? According to a study published in The Journal of the American Osteopathic Association, having a fitness buddy is much more effective than going it alone as those who exercised individually put in more effort but experienced no significant changes in their stress level and a limited improvement to quality of life,.
The same is true for building financial wellness. A partner can make a big difference. When choosing the right financial partner for you, it’s important to evaluate the tools and resources they offer to help you assess your current financial health, rid yourself of excess holiday debt, and plan for future financial wellness.
Improving your habits doesn’t have to be complicated and may not even require huge changes for you to start seeing positive results.
Here are five simple ways you can get started now:
- Start Small to Build Savings All Year – Just like a new exercise program, start small. Creating the habit is what you are looking to do. The 52-week savings challenge is a simple way to build your savings throughout 2024. The idea is to deposit $1 the first week, $2 the second week, $3 the third week, and so on. Or, even easier, automate the challenge by saving $26.50 each week for a year. It’s not too late to start. After just 12 months, you’ll have $1,378 in your savings account!
- Consider Debt Consolidation – If you have multiple loan payments or overspent using high-rate credit cards during the holidays, now is the time to consider consolidating those debts into a single loan. Depending on your situation, this may be a huge stress reliever as it can reduce monthly payments and help you get out of debt faster. Contact your local financial institution to evaluate your options. For homeowners, a lower-rate home equity loan or line of credit may be the best approach. While a lower-rate personal loan may be the best option for renters.
- Avoid Monthly Fees – If you’re paying account maintenance or other monthly fees, it might be time to switch to a free checking account. They do still exist and may even offer other convenient money management features like early direct deposit, which could hit your account up to two days faster. See what your local bank or credit union has to offer and don’t forget to look at their surcharge-free ATM locations. Many smaller institutions offer free access through shared networks that can help you avoid ATM fees throughout the year with nationwide, or even worldwide, access.
- Create a Family Strategy for Savings – Exercise works best when you have a goal in mind. The same is true for savings. What are you saving for? The general guidance for savings is to look at your needs in the short, medium, and long terms. Money for short term needs is saved in something that has less volatility, and a lower return, then money that you need in the long term. There is great research you can do on your own to set a simple strategy at mymoney.gov, a website created by the Federal Financial Literacy and Education Commission. Some local financial institutions also have great resources.
- Choose the Right Partner – Fees, interest rates and terms can vary widely among banks and credit unions. So can their levels of commitment to financial education and the local community. Take time to find a financial institution that aligns with your needs and your values. At the end of the day, financial advice you can trust is priceless and building a stronger community is something we can all participate in when we keep our money local.
Remember, just like training for a marathon with a running buddy, financial wellness is a journey that takes time. Each step can make a difference. Get started today and make 2024 a financially healthier year for you and your family!
Ray Springsteen, President/CEO
Abound Credit Union