Five New Money Habits for the New Year

December 18, 2020

As 2020 becomes 2019, lots of people vow to make physical fitness a regular practice in the New Year. But what about financial fitness? Here are 5 money habits that will tone up your financial wellness.

1. Keep watch on your accounts.

Getting into the habit of knowing what’s going on in your accounts can help keep your money safe, and keep you from miscalculating what funds are available.

Many credit and debit card issuers, including The Summit, have free online tools to help cardholders monitor transactions for fraudulent activity. These tools are also great for tracking your spending and staying on top of balances.

Be informed of suspicious card purchases in real time by signing up for services such as The Summit’s Purchase Alerts, which sends you notifications about how much was charged as well as when and where. And use Card Controls to quickly stop or pause cards, and report a card lost or stolen. Additionally, you can use our Summit Cards app, which makes it easy to view transactions, turn cards on and off, and set travel alerts when you’re on the go.

Also, the New Year is a great time to change and strengthen your account access passwords. Set reminders to change passwords every few months.

2. Automate deposits and payments.

Take advantage of automatic deductions to pay regular bills. Getting your electric bill charged to a card or deducted from your checking account each month will save you the headache of remembering to pay.

The same goes for any loan payments. Automatic deductions are paid on time, so you can avoid late charges and interest, and steer your account clear of a delinquent status that can affect your credit score.

Be sure to have your paycheck automatically deposited into your account as well, and funnel a portion to savings or investment accounts.

3. Use a financial advisor.

Getting professional financial advice is not just for the well-heeled. Everyone, no matter what your personal situation, can benefit from the training and know-how of a trusted financial advisor. Making financial planning a priority will help you prevent pitfalls, address concerns, and save for the coming months, years and decades.

Set up an appointment with an advisor (like those at The Summit) for the beginning of the year and check in at regular intervals to keep your plan aligned with your goals, and to readjust for life changes or unexpected issues.*

4. Cut impulse buys and extra expenses.

Talking yourself out of non-essential purchases is a habit that will immediately pay off. You may love that sweater you saw online, but if you already have a drawer full of perfectly good sweaters, why get another?

While frugality doesn’t come easily to everyone, if you make the effort, you soon won’t need to talk yourself out a purchase; instead, you’ll habitually only buy the items you truly need. The result: less debt, a bigger nest egg and money to do more of the things you want, like taking that trip or replacing a sad, stained couch.

When you know you’re going to be shopping, make a list and stick to it. Resist getting that cool gadget that’s on sale. Remind yourself that no matter what the price, buying it would be money spent on something you don’t need.

5. Be smart about influxes.

Getting a bonus or a gift of unexpected money? Great! Now think about where it could make the most impact.

Rather than spending the money on something non-essential, consider putting it to work for you. Use it to pay off debts, or deposit it right into your retirement fund. Look at it this way: if you weren’t expecting the money, you won’t miss it. And depending on how long you save that money, it could grow significantly.

If saving the whole thing is too extreme, try the rule of thirds: 1/3 to spend, 1/3 to donate to charity and 1/3 to save.

You must be a member of The Summit FCU to take advantage of its products and services. Membership eligibility required. Subject to credit approval. Must be 18 years of age or older to apply.

*The Summit Retirement & Investment Services Advisors are registered representatives of CUNA Brokerage Services, Inc. Representatives are registered, securities sold, advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor, which is not an affiliate of the credit union. CBSI is under contract with the financial institution to make securities available to members. Not NCUA/NCUSIF/FDIC insured, May Lose Value, No Financial Institution Guarantee. Not a deposit of any financial institution. CUNA Brokerage Services, Inc. is a registered broker/dealer in all fifty States of the United States of America.

This article was originally posted in January, 2019 on The Summit Blog.

Cynthia Kolko, The Summit Federal Credit Union