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Jan 03

Keeping Those New Year’s Financial Resolutions

by Mike Ferguson

(St. Charles, MO) – It’s among the most common New Year’s resolutions and it’s among the most broken promises we make to ourselves: managing our personal finances better.

On the new “Missouri Viewpoints”, Vantage Credit Union’s Rachel Parrent offers advice on taking control of your finances. She sees a pattern with her clients and understands why so many Missourians struggle to get ahead when it comes to managing money. To Parrent, the obstacles are sometimes a matter of mindset.

“It’s [money] is such a hard thing to get a hold of. It’s very easy to let go of but it’s very hard to get. So, I think the challenge for people is learning how to control what they have instead of worrying about ‘how much more can I achieve and how much more can I receive from my job or from other jobs, odd jobs, how can I control what I already have’. I think a lot of us want to live in denial.”

Step One to get passed that problem is to do an honest assessment of your personal finances. That means looking at, among other things, income, expenses and debt. Resources to help are available from fee-based financial planners and are often available at banks and credit unions.

Another part of that honest assessment, Parrent says, is deciding what you want to accomplish financially.

“I think the first place you need to start is figuring out what’s important to you.”

Whether decreasing debt and/or increasing savings are the main goal, or buying a new home or starting a business, understanding priorities has to come first.

“Where do you really want to be? Then you have to evaluate ‘what are was actually doing with our money and how can we possibly change our habits a little bit or modify things here and there to make this goal or this dream a reality’?”

Parrent knows that’s easier said than done. That’s why she recommends connecting with experts or at least looking for tolls to help. She says many worksheets and guides are available online through websites such as SmartAboutMoney.org and others.

While assessing and making a financial plan, Parrent says to keep your eyes on the monetary prize. That means remembering the goal you set once you determined your financial priorities. Doing that could make taking even uncomfortable financial steps easier.

Some studies show that 15% to 20% of Americans’ take home pay goes to impulse purchases: items we don’t need, items we didn’t plan to buy and sometimes items we don’t even remember purchasing at the end of the day.

That could be a candy bar at the grocery store checkout, an unplanned detour through the fast food drive through, a $5.00 cup of name brand coffee instead of brewing your own at home or nearly-countless other mini money traps.

On a bigger scale, the new year is a good time to evaluate other, bigger drains on your money. This includes where you use an ATM, as using ones outside of your bank or credit union’s network can cost you a few dollars per transaction. Also, Parrent recommends reevaluating your insurance coverage to make sure you have the right amount and that you are getting the best premium rates.

Another way to keep up the resolution after you assess your finances and set those priorities is to set short term goals. Parrent explains that because it’s easy to get discouraged when reaching for a large, long-term financial goal, smaller goals can provide reassurance.

That could mean setting a goal to have $100 in savings by the end of the month as part of your goal to have three months’ expenses in savings by the end of the year. Reaching the short term goal by the end of the month provides some confidence in your ability to reach the goal.

While getting started is sometimes the hardest part, Parrent says planning shouldn’t be a one-time endeavor. Reviewing your financial plan regularly is the best way to manage your finances. She recommends reviewing your money and goals every month.

She knows adding financial review and management to your personal to-do list may not be easy, but Parrent says it’s worth it in the long run.

“Anything that’s worth it is going to take work.”

On the web:

Missouri Credit Union Association: https://www.mcua.org/

Vantage Credit Union: http://www.vcu.com/

Permanent link to this article: http://missouriviewpoints.com/keeping-those-new-years-financial-resolutions/