The dawn of a new year means fresh starts and new beginnings, making it the perfect time to set goals for the next 365 days. These resolutions often center around personal improvement, such as a healthier diet or more exercise, and not enough on money matters. Instead, by focusing on financial health for the year, you are enabling yourself to build your savings, increase your credit score and improve your budget. In this blog, we will discuss ways you can plan better for your financial goals for the new year.
Start with Good Financial Goals
Setting solid financial goals for the new year requires reflection upon the past year. Were there things you wished you had accomplished, such as saving more money? Did you do things you regret, such as spending too much money on an activity or increasing your debt with an unnecessary purchase?
Everyone has a unique financial situation so review the good and bad from last year to identify what you would like to resolve to do this year. In a survey conducted by Fidelity Investments, 41% of Americans tend to focus their financial planning on saving more, while another 38% want to pay down debt and 30% resolve to spend less.
By planning better, you can focus on what is most important for your financial future and identify the steps needed to reach your goals.
Use a Budget
Creating a budget is the smart first step in planning your year. If you currently use a budget, update it with your new priorities. If you need to create a budget, start with basic costs, such as monthly utilities, rent, groceries and money set aside for savings. Paying off debt is a top budgeting resolution for 2025, says The Times of London so add that to your budget next, and a strategy for accomplishing it if you are paying off multiple loan accounts.
For example, one strategy is to pay off higher interest-rate debts first, which can save you money in the long run. Another is to pay off the lowest balance first and then roll the money you used to use on that payment into paying off the next-highest debt. Using this method on all your debt accounts will let you pay off your highest balances quicker.
Short- and Long-Term Savings
After your budget is in place, determine your savings goal for the year. Whether you are saving for a specific short-term goal, an emergency fund or long-term growth, having a savings plan carved out in your monthly budget will help you reach your target.
For example, by using the 50-30-20 budgeting rule, you can incorporate savings into your monthly budget. This rule requires you to set aside 50% of your monthly income for living expenses, 30% for wants such as hobbies and entertainment, and 20% for savings. When it comes to the 30% of wants, this rule is flexible. If you do not use 30% of your income towards entertainment one month, apply the remainder to your savings and grow your money even faster.
Another important part of your short- and long-term savings plan is how you will save your money. Credit unions and banks offer several types of savings products that come with varying yields. The more common products are money market accounts (MMAs), share certificates (known as certificates of deposit at banks) and high-interest savings accounts.
When creating a savings plan, select a deposit product that offers no minimum balances, flexible terms and higher yields to get the most bang for your buck. Planning requires research so do your homework to find the savings product that fits your goals for the new year.
Review and Build Your Credit
If you plan to borrow for a car loan, home loan, credit card or recreational vehicle loan this year, having a high credit score increases your chances of being approved as well as being offered lower interest rates. Your credit score is based on your credit history and is crucial in determining the rates and terms offered by lenders.
In general, credit scores below 670 could use a little help. There are a few ways that you can increase your score. The first is to consistently pay down your debt and pay your monthly bills on time. Limiting the number of credit accounts you apply for will also help increase your score because it shows you are not constantly authorizing credit reviews by lenders.
You can receive a free credit report from each of the three credit reporting bureaus each year. Visit AnnualCreditReport.com to get started. Your credit report will show you all the credit accounts you have opened, their current balances, payment histories and recent closed accounts. If there are any discrepancies in your credit report, be sure to file a dispute with the credit bureau on those items. This proactive approach can help keep your credit score from dropping.
How Can TCU Help
Plan better with Travis Credit Union in the new year and beyond. TCU is focused on your financial wellness and we have the products, tools and resources to help you reach your financial goals. For example, TCU offers a variety of savings products that can help you grow your wealth, such as money market accounts, share certificates and target savings accounts.
If you need help improving your credit, our partnership with Experian Boost can help increase your score instantly. If you plan to borrow money this year, check to see if you are already pre-qualified for a loan with TCU by using our pre-qualification portal.
Make this new year a great one by becoming a TCU member today!