Stick to a budget
Creating and keeping to a budget is the first step toward improving your finances. Simply add up all of your monthly expenses and then subtract that amount from your total monthly income. The difference is your discretionary money. If you find yourself short each month, identify expenses that can be reduced or eliminated so you'll stay within
Set financial goals
Figure out your short- and long-term financial goals, and how much you'll need to save to achieve them. A short-term goal would be saving money to buy a car, while a long-term goal would be to save for college tuition or a down payment on a home. Once you know how much you need to save, determine what to set aside monthly. A TCU Target Savings Account is a great financial tool to help you reach your goals.
Create an emergency fund
Do you have enough savings to cover yourself if you unexpectedly become unemployed or have a sudden drop in income? An emergency fund of between three to six months salary may help see you and your family through difficult times.
Pay down credit card debt
This year, resolve to make a dent in your credit card debt. With interest rates in the high teens, the sooner you pay off or substantially lower your credit card balances, the more money you'll save in interest payments. Once you've gotten your debt under control, use your credit card only when absolutely necessary or leave it at home and carry a debit card. TCU's free VISA Debit Cards are a great way to track and control your spending.
Refinance to a low-rate home loan
If you're a homeowner with good credit and equity in your home, take advantage of today's historically low interest rates to refinance your existing mortgage and save money. If you've got an adjustable-rate mortgage, refinancing to a fixed-rate will give you peace of mind over the life of the loan. If you've already got a fixed-rate loan, consider how much money you'll save in monthly payments if you refinance to a lower rate.
Stop impulse buying
To improve your personal finances, remember to place your needs before your wants. You may want an iPad for yourself but is it something you need or can afford? By checking your impulse buying with a dose of reality, you'll teach yourself the discipline needed for a better financial year.
Be a smarter car buyer
If you intend to purchase a new or used vehicle in 2012, there are things you can do to stay under budget. First, get pre-qualified for an auto loan so you'll have an idea of what you can afford. Second, do your research about the brands, models and features you're interested in so you'll have an idea of what they should cost. You can find this information at Web sites such as Edmunds.com. Also, remember to negotiate down from the sticker price and to keep trade-in negotiations separate from the vehicle price negotiations.
Ensure you're insured
Be sure you have the insurance you need for your home, auto, life and property. If others are dependent on you and your income, you'll need enough life insurance that they can rely on for the short-term. Long-term disability insurance is another way to protect against lost income. Also, you should carry adequate liability coverage on your auto and home policies. If you want to lower your annual insurance premiums, you can raise your insurance deductible. And remember to purchase insurance only from reputable companies such as Travis Credit Union.
Take advantage of employer savings plans
Take advantage of employer tax-deferred investment plans, including 401(k), 403(b) or IRAs. This is especially true if your employer matches a percentage of your investment-that's like free money! Generally, you won't have to pay taxes on these contributions and earnings until you begin withdrawing on them after retirement. This allows your investments to grow much faster. Please consult with your tax advisors on the best options for you regarding these plans.
Prepare a Will
Just as life insurance is important for you and your family, a will outlines exactly how your personal estate of funds, property and personal affects will be distributed. About half of all Americans die without a will, leaving the final distribution of your personal state to the courts, and not to you. Having a will is especially important with young families because it allows you to choose a guardian for your children. You'll find various software programs available that allow you to create your own will. Lawyers also offer this service.
BALANCE Financial Fitness Program