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The Path To Financial Well-Being
As the new year approaches, many people begin to set goals, often involving their health. With economic uncertainties, it’s equally important to evaluate your financial health.
The Financial Health Network identifies the four components of Financial Health as Spend, Save, Borrow, and Plan. Examining these areas helps assess your ability to be resilient in times of hardship and to achieve goals.
Let’s dive in:
- Spend – develop or revisit your budget to ensure you’re spending less than you earn and are able to pay obligations on time.
- Save – modify your budget as needed in order to contribute regularly to short- and long-term savings. If you haven’t already, aim to build an emergency fund to cover unexpected expenses.
- Borrow – improving your credit score is key to having affordable borrowing options, keeping insurance rates down, and more. This doesn’t mean you have to carry debt; in fact, it’s wise to pay debt down to free up more of your income.
- Plan – in an emergency, costs add up quickly. Having adequate insurance helps protect you and your assets. Review your coverages and plan. Items on your to-do list can include preparing for retirement and estate planning.
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If you find yourself feeling stressed or pressured to spend during the holidays, you’re not alone. To prioritize your time and money, focus on what matters most and make a plan.
Perhaps that means embracing experiences, like having more quality time with loved ones, exploring free or low-cost activities in your city, or volunteering your time and giving back.
If your friends or family swap gifts, discuss guidelines and share ideas on ways to alleviate your budgets. For example, you can draw names or set up a ‘white elephant’ exchange to avoid needing to buy far too many gifts.
It’s also wise to develop a gift list and a budget for each person you’re shopping for. Setting limits can help you avoid overspending, and knowing what to buy can help you hunt for sales and coupons.
Though it’s tempting, try to avoid tapping into credit or similar options if you can’t afford to pay the balance in full after your grace period is up. Interest charges and fees can add up, sometimes causing your balance to rise steeply.
Remember, you have the power to shape the holidays into something you’ll cherish for years to come, and your presence and sentiment are the greatest gift of all.
In honor of International Credit Union Day, celebrated every third Thursday in October, we’re on a mission to raise awareness about the credit union difference.
Voluntary Membership. Joining a credit union is voluntary and open to all that are eligible – with many ways to qualify and join.
Democratic Control. A credit union is owned and controlled by its members. Each member has a vote, even in selecting the volunteer board of directors.
Members’ Economic Participation. Members engage in business and contribute to financial success while taking advantage of benefits and services offered. That’s what A+FCU refers to as banking on each other.
Autonomy & Independence. While credit unions work with other organizations, they remain autonomous and follow the directives of their membership.
Education, Training, & Information. Credit union and community members benefit from financial wellness offerings. At A+FCU, for example, we offer workshops, financial counseling, and programs for youth at no cost. Our blog also helps keep the public informed about financial topics and news.
Cooperation Among Cooperatives. Through partnerships with other credit unions and networks, we strengthen our credit union.
Concern For Community. In addition to promoting financial well-being, credit unions build stronger communities. A+FCU provides scholarships, grants for educators, cash back for schools, and community support through our A+ Gives program.
With sharp increases in prices, you might be feeling the effects of inflation more than usual. This is a reminder that although it’s getting more attention now, prices are always rising due to inflation. So what can you do?
Take a look at your budget, and review allotted amounts for income, spending, saving, and investing. Alleviate the spending hike by finding ways to earn extra money or save on expenses.
While you can certainly cut back on wants – like subscriptions, eating out, etc. – you can also find ways to pay less. For example, comparing quotes for auto, home, and life insurance policies to get the best deal can save you hundreds. The little things add up too.
Another way to try to keep up with inflation or increase income is through saving and investing.* Since your money loses value each year, it’s important to earn a return on it to offset that loss. Consider speaking to a financial advisor about your goals so they can match you with the right products. You can often get started with little money.
With record-high gas prices, you’re likely looking for ways to save. Fortunately, there are many ways to reduce costs, maximize efficiency, and take advantage of benefits and rewards.
To get your gears going, we’re sharing 12 Ways to Save Money On Gas:
- Use apps like GasBuddy to find the lowest price
- Don’t warm up your vehicle for more than 30 seconds
- Don’t be heavy on the pedal
- If you’re in the market for a new vehicle, choose electric or hybrid
- Turn the engine off when stuck in traffic or passing the time
- Keep your trunk light to trim your vehicle’s load
- Don’t keep anything on the roof to avoid a fuel economy reduction
- Turn the AC off when you can
- Cut down on driving by minimizing trips or using another mode of transportation
- Shop for gas rewards or choose the payment option with the most benefits
- Use the right motor oil
- Keep your car in top shape
Struggling to balance your income and expenses these days? Check out these 4 Simple Ways To Get Extra Money or reach out to our partner, BALANCE, for recommendations on reworking your budget. Simply call 1.888.456.2227 today to take advantage of free, one-on-one coaching with a financial expert.
Without a budget, you may be left to wonder how much money’s coming in, where your money’s going, and when you’ll reach your financial goals. It’s a good idea to create or revisit your spending and saving plan to ensure it still meets your needs.
One of the best places to start is to look back at the prior month to estimate income and expenses. If you want to rework your budget, try using the 50-30-20 rule to help you decide how to allocate funds to needs, wants, and savings.
To ensure you follow through as best you can, use a notepad, spreadsheet, the envelope system, or a Financial Management Tool to keep track of spending and adjust as needed. Something else you can do is aim to make positive behaviors easier and negative behaviors more challenging.
- Automate your savings so you don’t have to remember to transfer funds
- Simplify making payments with Bill Pay
- Set up autopay whenever possible
- Leave credit cards or extra cash at home
- Remove payment information from devices and websites
- Shop with a list or place a curbside order to avoid impulse buys
- Set a reminder to periodically review your budget
Looking for ways to save? Now’s the time to review your insurance policies to compare rates and see what discounts you may be eligible for.
You can shop around and request quotes from different insurance companies to see where you can get the best deal. Plus, you may find a provider who offers discounts based on your age, marital status, or credit health, or you could receive a loyalty discount from your current provider.
Take a look at your current policy to see where you can make adjustments to maximize your savings. For example, try bundling your home and auto insurance, increase your deductible, reduce coverage on older vehicles, and go paperless.
Insurance is an essential component of financial health but shouldn’t break the bank. Be sure to conduct your own research and ask questions to find the policy that best fits your budget and works for you.
In a seller’s market, it’s common for more than one family to be interested in making an offer on a home, causing a competitive bid situation. Instead of paying more than what you can afford for a home, use these tips to put yourself ahead of the competition.
Your first step when shopping for a new home is to get a home loan pre-approval. A pre-approval ensures you have secured financing and will also help you know how much home you can afford, plus speed up the closing process.
For best results, work with an experienced real estate agent. They’ll have knowledge about the area, pricing, early access to new listings, and can negotiate on your behalf. Your agent will help you find a home that best meets your priorities at a price that works for you.
Make your offer more appealing by taking on repairs to the home yourself and staying flexible on your closing date. These buyer concessions are low-cost, creative alternatives that can help avoid a bidding war.
Don’t be discouraged if the first home you make an offer on doesn’t work out. Keep looking – your dream home could be right around the corner.
Raising a child comes with the responsibility of teaching them life skills and setting an example. One way to help your kids be financially savvy is through awarding an allowance.
Decide together how your child will earn their allowance. This can include being rewarded for positive behaviors or actions, receiving money based on their typical expenses, or a combination of both. As your child grows and their needs change, so too will their responsibilities and your allowance system.
Once you establish how your child will earn money, the next step is to determine how much they’ll earn. One simple approach is to tie the total amount being awarded to the child’s age. Some recommend giving an amount equal to half their age; ultimately, it’s up to you to decide what’s reasonable.
Next, decide on a ‘payday’. Start them on a schedule, and use that time to discuss what they plan to do with their income. Explain to them the three main ways to use money: save, spend, share.
It’s important they make their own decisions and mistakes to learn money management skills. They may not always make the right choice, but with your guidance they can be set on the path to success.
If your goal is to build or improve credit, it’s important to understand how credit scores work.
While there are different scoring models, credit scores are generally influenced by five factors: payment history, balances, length of credit history, new accounts, and credit mix. Familiarizing yourself with these factors can help you take appropriate action.
It’s also helpful to keep a close eye on all things credit. You can obtain a free copy of your credit report from each of the three credit reporting agencies every twelve months at annualcreditreport.com. To maximize your score, you’re encouraged to dispute errors that can adversely impact your score.
It’s worth noting your credit report doesn’t include your credit score. While some financial institutions, credit card companies, and credit score services provide your score for free, they can also be purchased from each of the three major credit bureaus – Equifax®, Experian™, and Transunion®.
If you’re ready to take the next step in your relationship, talking about finances with your partner can help minimize conflict and build a foundation that supports mutual growth.
One thing to discuss is your financial history – everything from who handled finances while you were growing up to your inclination to spend or save to how you feel about money.
You should also discuss how you’ll handle expenses. What will be considered a shared expense? Will each of you contribute the same amount? Will you establish a joint account for bills or transfer money as needed?
Included in your list of considerations is what you hope to accomplish together. No matter what you’re planning, set a savings goal. Decide how much you’d like to contribute each month and what account you’ll use to keep the funds.
Finally, don’t forget to assign responsibilities so you stay on top of managing your money and paying bills. If you’ve divided tasks, periodically update the other on how your goals are progressing and make changes if needed.
An extensive amount of debt can be overwhelming, causing stress, restricting future income, and costing you a hefty amount of money in interest. If you’re ready to pay down and eliminate debt, you’ll need to get your budget in order and develop a plan.
Begin by taking inventory of your debts. We recommend using our free fillable Know What You Owe worksheet to make note of the creditor, balance, minimum payment, and interest rate for each credit account.
While you can refinance or consolidate debts to obtain a better rate or terms, you can also tackle balances yourself. After determining how much more money you can apply to your debt, you can use strategies like the Stack Method or the Snowball Method to focus your efforts.
To be successful, it’s helpful to be aware of your triggers and set barriers for yourself, like leaving your credit card at home, unsubscribing from store ads, and removing saved payment information. This can help avoid adding to your debt load so you can remain committed.
Toward the end of the year, people usually look back to see what worked well and what they hope to do differently in the year to come, often thinking about fitness, career, and personal goals. If you hadn’t planned on it, you’re encouraged to make time to review your finances too.
The goal is simply to identify areas that can help improve your financial well-being. To start, examine your income and expenses in order to update or build your budget. This will help you understand how much money is coming in, identify spending leaks, and rework expenses.
The idea is to make additional room for financial priorities, such as paying down debt, building an emergency fund, buying a home, saving for a vacation, or other goals toward which you’re working.
Now’s also a good time to review general fiscal matters, like your insurance policies, retirement contributions, tax withholding, and your credit report. Making adjustments, comparing premiums, and staying on top of credit can help you better manage what the future may bring.
According to the National Retail Federation, consumers planned to spend an average of $988 on gifts, food, decorations, and holiday-related purchases last year. In 2021, that number is expected to rise.
If you’re concerned about breaking the bank, it’s best to develop a Holiday Spending Plan ahead of the season. Think back to previous years to anticipate purchases, build a holiday budget, and set limits for different spending categories.
Create a gift recipient list, set individual budgets, and think of possible gift ideas. To help you save, look out for price drops, host a gift exchange, or make your own gifts.
Lastly, don’t let the holidays stress you out. Enjoy time with your loved ones with free or low-cost experiences, such as baking, checking out festive lights and displays, volunteering together, or whipping up hot cocoa. Moments like these make for memorable holidays.
To help you build your holiday spending plan, create a gift list, and prioritize your time, we’re sharing our free Holiday Spending Survival Guide.
To maximize financial aid for college students, it’s important to meet your school’s priority deadline. In fact, it’s best to apply as soon as possible as some aid is awarded on a first-come, first-served basis. The Free Application for Federal Student Aid (FAFSA) is often used for both need-based and merit-based aid, so all students are encouraged to apply.
To prepare, students should review this list of things you’ll need to fill out the FAFSA. One item that often stumps students is submitting tax information from two years ago. Locate necessary documents to submit the information manually, or use the IRS Data Retrieval Tool to import data while logged in to your fafsa.gov account.
If you’re considered a dependent student, your legal parent will also need to provide personal and financial information then e-sign your application.
Should you need to borrow, ensure you fully understand the terms of the loan, borrow only what you need, and choose loans with the most favorable terms.
Open enrollment is an important time of year. Unless you’re eligible for a special enrollment period due to a Qualifying Life Event, this is the only opportunity you have to enroll in or modify coverage. Be aware of upcoming deadlines and give yourself ample time to review options.
Health plans can vary widely, so it’s best to look at available plans holistically to compare. If needed, use your insurance provider’s cost estimator tool to help you make a decision.
Also, while you likely have the ability to modify retirement contributions throughout the year, now is a good time to evaluate your progress.
Finally, open enrollment often involves selecting more than just a health plan. You’re likely offered life, accidental death and dismemberment (AD&D), and disability insurance, among other benefit options.
Though you hope you don’t need many of these benefits, they become critical in difficult times. As your situation changes, you’ll want to revisit to ensure your coverage continues to meet your needs. On that note, update your beneficiaries as needed and reach out to your Human Resources department if there are questions.
As a parent or caregiver, you can help children acquire useful life-long skills and wisdom by talking about money and providing opportunities for them to practice handling money. One simple way to help sharpen your child’s financial skills this summer is by inviting them to help you shop for school items.
Our Guide for Back-to-School Shopping and Budgeting will walk you through how to involve kids in this hands-on activity, including developing rules, creating a budget, shopping wisely, and evaluating purchases together. We even have a Back-to-School Budget Worksheet available for you to save or print.
Learning concepts like setting spending limits, differentiating needs and wants, and avoiding impulse buying helps establish a strong foundation for your child’s financial future. As they mature, you can build upon what they know and introduce more complex topics like inflation or when and how to use credit responsibly.
To support your family in that journey, A+FCU invites you to review these age-based recommendations and explore our library of blogs on Family & Finances.
Financial shocks can leave many feeling vulnerable and stressed. What begins as financial concern can soon begin to affect our physical and mental health too.
To improve financial well-being, we encourage you to take steps that will help you gain better control of your finances.
The foundation for it all is establishing a budget. Identify income sources and give every dollar you earn and receive a purpose. It’s also wise to build an emergency fund so you have reserves to fall back on when needed. Saving regularly can help you reach short-term and long-term goals.
On occasion, there may be a need to take out a loan. Work on improving your credit score to help your approval odds and qualify for better terms – this helps save money on interest and associated costs. Have a plan to pay down debt and minimize how long future income is tied to debt obligations.
Lastly, protect what you’ve worked hard to build by having adequate insurance for yourself and your assets. Failing to do so can have a lasting impact on your finances and your loved ones.
A vacation can be a great way to disconnect, relax, and spend time with loved ones. While everyone’s situation, comfort level, and budget are different, we can all take the same steps to ensure the experience is pleasant.
First things first, decide what you’re willing to spend and set a budget to avoid straining your finances. With this in mind, choose a destination or make plans to create a fun-filled staycation.
No matter what you decide, it’s best to establish an itinerary with activities you’d like to take part in. If applicable, make note of the cost per person along with pertinent details to maximize your stay and factor the expense into your budget.
To save money, find discounts, stay with a friend or family member, redeem reward points wherever possible, and incorporate free or low-cost experiences into your itinerary.
Finally, establish a vacation fund. Set a reasonable goal for your timeframe and contribute regularly. If needed, cut back on unnecessary expenses or find ways to earn extra income to meet your goal.
Since repairing or improving your credit score takes time, it’s important to obtain your free credit report well before applying for a mortgage. Review the report for accuracy, dispute any errors, and continue to maintain your accounts in good standing to help improve your approval odds and qualify for better terms.
A mortgage pre-qualification is a beneficial initial step to help you understand if you’re on track to qualify for a mortgage. It will give you a ballpark estimate of how much home you can afford, your monthly payment, and the amount of cash that might be needed to close on a home.
When you’re ready to begin your home search, it’s best to apply for a pre-approval. A lender will conduct a thorough review of your finances and pull your credit report to conditionally approve you for a mortgage, up to a certain amount. This pre-approval is usually valid for 60 days and can help you narrow your search, negotiate, and close sooner.
There’s no better way to learn than by doing. Encourage your child to practice smart money management by starting them off with their own piggy bank, money jars, or youth savings account.
While it may be difficult, it’s important for adults to allow kids to make their own financial decisions. Children may not always get it right, but with your help, they can certainly identify what they can do differently in the future to get a better outcome.
Not sure where to begin? Our age-based guidance is great for identifying concepts parents and caregivers can use to help their kids learn as they grow.
Here are additional resources for raising money smart kids:
- 6 Powerful Money Lessons For Kids
- A Useful How-To On Teaching Needs Vs. Wants
- Easy Ways To Teach Kids About Earning Money
- A Parent’s Useful Guide To Teaching Kids About Debt
- Helpful How-To On Teaching Kids About Money
Take advantage of free financial education from our partner, BALANCE. From confidential coaching to videos and articles, get the resources you need to help with your fiscal matters.
Get on the path to financial success with these resources.
Financial health is a key part of overall wellness. Count on us to provide the knowledge and tools you need to make sense of your money, better your financial journey, and improve your peace of mind.
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