It's a new year and a great opportunity to set your financial goals for the next 12 months.
Here are a few common financial resolutions and some tips on how to achieve them.
To save more money, the first step is spending less. Try some of these cost-cutting efforts:
- Review and track how much you earn and how much you spend. Find a budgeting app or create a budgeting worksheet to document your typical monthly income sources and expenses. This will help you see where you can make some cuts. WaFd Bank offers a free online app-based budgeting tool where you can track your spending.
- Give yourself at least a day before making big purchases. This gives you time to make an informed decision about the purchase.
- Pay bills through automatic payments (auto-pay). This will ensure you pay your monthly bills on time so you don't have any late fees.
- Only use ATMs associated with your bank to avoid paying transaction fees. WaFd Bank offers more than 40,000 fee-free ATMs.
- Find inexpensive activities and entertainment options. Check event listings in your area to see if there are free or low-cost things to keep you busy.
- Cut down on your dining-out budget. Commit to eating out one less time per month to start.
- Pack a lunch and make your own coffee. These simple steps could save you $10 to $15 per day or more.
When it comes to saving, many experts recommend having enough money available to cover three to six months of living expenses. If making a budget, consider the 50-30-20 plan where you will spend 50 percent of your take-home pay on monthly needs, spend 30 percent on wants and save 20 percent.
Here are some ways to save:
- Stock away money in your personal savings account. Building your savings does not have to happen overnight. Set small goals like saving an extra $25 or $50 each month. As you cut costs in other areas, put those extra dollars in a savings or investment account. Consider setting up automatic transfers from your checking to your savings account each month so you meet your savings goal.
- Contribute to your retirement savings account (or open a new retirement account). Check with the Internal Revenue Service (IRS) to see how much you can contribute annually to different types of retirement savings accounts. Learn about the different rules and restrictions for each type of account. WaFd Bank offers two types of Individual Retirement Accounts (IRAs) - Traditional and Roth.
- Contribute to your child's college savings plan. There are several types of college savings plans to choose from that can grow your savings over time. Make sure to investigate each investment option closely. WaFd Bank offers the Coverdell Education Savings Account, allowing you to make after-tax contributions of up to $2,000 annually per child. When the funds are withdrawn, they are tax free.
Pay off your debts
If you are ready to be free from debt — whether that's from credit cards, student loans, medical bills or other high-interest debt — start by paying a certain amount toward your debt each month. Once you are debt-free, try to pay off your credit card bills each month to avoid paying interest. WaFd Bank offers credit cards with no annual fees, fixed interest rates and plenty of rewards.
Improve your credit score
If you are looking to raise your credit score, keep the following tips in mind:
- Monitor your credit score by reviewing your free credit report every 12 months. To order your free credit report, visit www.annualcreditreport.com.
- Pay your bills on time. More than one-third of your credit score is based on whether you pay your bills on time, every time.
- Make sure you have a credit card. Using a credit card responsibly can improve your credit score by building a positive payment history. Make sure to not spend too much money using the credit card and to make payments on time (consider an auto-pay option).
Need help managing your money?
We're here to help. Call us at 800-324-9375 or visit wafdbank.com to open an account today, apply for a credit card, or learn more. Interested in opening a savings account? WaFd Bank's savings account requires just $25 to open ($10 if under age 18) and only $100 to earn interest and avoid a monthly service fee.
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