Simple Goals for a Better Financial Future
With a new year at hand, this is the ideal time to think about the upcoming months financially and what you want to accomplish. Does your budget need a boost? Are your savings currently in survival mode? Are major purchases, such as a new car or home, in the immediate future?
Setting new year’s resolutions helps you prioritize your goals, which then motivates you to make them happen. Whether you plan to save more, pay off debt or increase your credit score, identifying what you want to accomplish at the start of the year not only makes it even more possible, it also helps alleviate stress. In this blog, we will discuss practical tips on planning for a better financial future.
Create Impactful Resolutions
There are many goals that you can strive for in the new year regarding your personal finances, according to CNBC. A Fidelity Investments 2024 Financial Resolutions Survey found that 41% of American respondents wished to save more, while 38% wanted to pay down debt. Another 30% resolved to spend less.
Financial resolutions can have a positive impact on your life because they can generate a greater sense of stability and peace of mind that you are doing positive things for your financial wellness. Having a clear plan on what you want to accomplish sets you up for success, especially if there are big goals ahead for you this year.
How Can You Create a Realistic Budget and Stick to It?
Budgeting is a crucial step toward reaching your financial goals. It keeps you focused on your money and separates necessary spending from discretionary spending. To create a realistic budget, start by listing the amount needed each month for rent, utilities, groceries, car payment, gas, insurance and savings. Next, list the amounts of discretionary monthly spending, such as entertainment, streaming services, dining out, travel, etc.
Add the lists together and compare the total against your monthly net income. If your income is more than your spending, you are within budget. If your spending outpaces your monthly income, you are in trouble. If so, start identifying areas in your discretionary list where you can cut back. For example, can you reduce the number of times you eat out or cut back on the number of visits to your favorite coffee shop or tea café? The key is to take an honest look at your money and make realistic changes as needed to improve your financial wellness.
To help you stay within budget, check if your financial institution’s mobile app has a spending tracker or download a third-part app that does. This digital tool will help you keep track of your daily spending so you will always know how you are doing with your budget.
Why Is Building an Emergency Fund Essential?
While saving money may be part of your budget, it is also smart to have a separate savings account known as an emergency fund. This fund is for unexpected expenses that may come up. An emergency fund can ease stress and give you peace of mind because you can address financial emergencies without altering your monthly budget.
Emergency expenses include medical emergencies, car repairs, unexpected home repairs and other one-off surprise bills. When setting up your emergency fund, be sure to keep it as a separate account from your short- or long-term savings and do not withdraw from it unless it is a financial emergency.
The best way to build your fund is via automated savings, such as using direct deposit to set aside some money each payday. The best savings products for this fund should offer high interest rates. These include money market accounts and certificates.
What Strategies Can Help Reduce Debt Effectively?
If your budget includes making payments on loans and credit cards, there are strategies you can take to eliminate your debt. This is important because debt can become difficult to get out of if you have multiple loans with high interest rates. This means that much of your payment is going toward the interest and not to reducing the principal amount owed.
Paying off and paying down debt are among the highest anticipated financial resolutions, with about 25% of Americans wanting to pay off debt, according to the Motley Fool Money's 2025 Financial New Year's Resolution Survey.
The first step to reducing debt is not to open any more credit accounts. The second is to follow one of these strategies to reduce or pay off debt:
- Pay Off Highest Rate First: Paying off the highest interest-rate debt first is a prudent strategy. High-rate, longer-term payments can slow your progress because of the interest added to the balance owed, especially if you just make the minimum monthly payments. This strategy involves paying much more than the minimum payment each month so that you can begin reducing the actual balance owed.
- Pay Off Lowest Balance First: Using this strategy, you will focus on paying off the lowest balance first so that you can eliminate the debt faster. Once you do so, apply the money you used for those payments to your next higher debt. Continue this practice until all your debts are paid.
- Consolidate Debt: Having multiple loan accounts with separate monthly payments and different interest rates can be hard to track. Another debt-reducing strategy is to consolidate your debts into one single loan with one monthly payment. This can be done by applying for a personal loan or a credit card with an introductory offer that features a zero interest rate for a year or two. If you are a homeowner, you could apply for a home equity loan or home equity line of credit (HELOC) to consolidate your bills at even lower interest rates.
How Can You Improve Your Credit Score in the New Year?
Your credit score and credit history affect the interest rate offered to you by lenders when you apply for a loan. This new year, make it a point to review your credit history to see where you stand and to be sure your credit report is accurate. You can get one free report each year from the three U.S. credit reporting bureaus by visiting AnnualCreditReport.com.
There are several ways to improve your credit score. One of them is to ensure you pay your monthly bills on time to show lenders you are a responsible borrower. Another is to not max out your existing credit lines so that you keep your credit utilization low. Also, dispute any discrepancies in your credit report that could lower your credit score. This is especially important to do several months before buying a car or home so that your credit history is correct.
What Are the Best Practices for Retirement Planning?
If one of your financial resolutions is to plan better for retirement, you are already off to a good start. Retirement planning can start at any age, and the sooner you do it, the better off you will be decades down the road.
The first place to start is with your employer. Ask about any retirement plans offered, such as a 401(k), especially if the company offers to match a certain amount of your contribution each month. If your employer does not offer a plan, explore options such as individual retirement accounts (IRAs) and Roth 401(k) programs. Some financial institutions, including Travis Credit Union, have a wealth management team who can help you identify ways to grow your money.
If you are already contributing to a retirement plan, consider increasing your contributions to save more money. Having a clear plan for retirement can save you from being short on income when you do retire.
How Can You Enhance Your Financial Literacy?
If you’re resolved to learn more about money this year, there are several ways to do it. The first is to check with your preferred credit union or bank to see what financial education programs it offers. Some, such as Travis Credit Union, have online programs that can assess your knowledge about money and assign you specific courses so you can learn more. Also, do an online search for financial literacy programs near you to see what is available in your area.
How Travis Credit Union Can Help
Travis Credit Union wants to be your preferred financial partner and can help you with your financial resolutions for this year and beyond. TCU is focused on your financial wellness, so it offers a variety of savings products to grow your wealth, such as money market accounts and share certificates. The credit union can also help you borrow better with auto and home loans and low-rate credit cards with rewards.
If your goal is financial literacy, TCU members have access to Knowledge Base, a free, online financial education platform that can assess your financial knowledge and provide you with the courses you need to become well-rounded on money matters.
TCU’s digital banking tools ensure your accounts are available online at any time so you can plan better and spend better. To improve your credit this year, TCU’s online Experian Boost can help increase your credit score instantly. You can also check your lending offers from the credit union online using our pre-qualification portal without impacting your credit score.
Partner with TCU to make all your financial resolutions come true this new year. Visit us online at Traviscu.org, make an appointment at a branch or call (800) 877-8328.