December 29, 2020

Money Jar with tag This is My Year to Save

It’s no secret that 2020 didn’t go as planned for many of us, but the New Year is a time to start fresh and look forward. There’s no better time to make changes in your life, especially if you’re looking to get your finances on track. If this seems like a daunting task, fret not! LUSO Federal Credit Union can help you along the way!

Resolution 1: Build a Budget

The first step of any money-saving resolution should always be to build a budget. If you don’t know where your money is going, it will be difficult to make decisions about your future spending. Creating a budget (and sticking to it!) will help you maintain accountability for your spending. After all, the best way to avoid financial strain is to plan ahead!

Ways to Get Started:

  • Use the 50/30/20 Rule with every dollar assigned to a category: Needs (50%), Wants (30%), or Savings (20%). Visit our Financial Wellness Center to learn more about this rule and find our 50/30/20 calculator to help you see how much of your monthly income should be used in each category.
  • Use a Budget Calculator to meet your goals and prioritize expenses. With this calculator, you can list your monthly and yearly expenses and compare them to your income. This exercise should help you determine if you are overspending in any areas so you can look for ways to cut back.

Ways LUSO Federal Credit Union Can Help:

We’re always here to help our members! Simply contact a Member Service Representative at 844-LUSO-FCU or email us to ask for help with managing your money!

Resolution 2: Pay Off Your Debts

Managing debt is the best way to find financial freedom! We talk about saving all the time, but here’s something that you don’t hear as often: paying down your debt IS saving! When you actively reduce your debt, you save on interest. When you pay on time, you save on late fees and maintain your credit score – which will save money in the long term. This New Year, we encourage our members to acknowledge and celebrate reducing your debt as a form of saving and a component of your financial plan.

Ways to Get Started:

  • Debt Snowball Method: With this method, you start small and work your way up. Begin by paying off your smallest debt first. Then, take the amount you were paying for that debt and pay it toward the next smallest debt, and so on until everything is paid off.
  • Debt Avalanche Method: Just like an avalanche, you knock out the big things first and then work your way down. Focus on paying off your highest interest rate first, then roll those funds into the next highest, and then the next.
  • Debt Consolidation: Debt consolidation allows you to combine all of your debts into one payment by taking out a new loan, ideally with a lower interest rate, and using it to pay off your debts. Be careful though, sometimes you could end up being in debt longer because of the new loan and thus paying more interest overall.

Ways LUSO Federal Credit Union Can Help:

If you have multiple high-interest rate debts, consider using your home’s equity to pay those debts off. This way, you’ll have one interest loan payment each month. We also offer personal loans and a balance transfer VISA® Credit Card to help you consolidate your payments. Speak to a Member Service Representative or Lending Specialist to discuss your options.

Resolution 3: Build Your Savings

People who have a savings plan are twice as likely to save successfully. Even if you have a great handle on your finances, unexpected challenges can come along that threaten your financial stability. Unfortunately, nearly 25% of all Americans have no emergency savings; 16% have taken on more debt; and nearly one-third of households reported lower income since the start of the pandemic, according to a 2020 report by Bankrate.com. One of the most effective tools for preventing a large-scale financial disaster is an emergency fund, an amount of money that is set aside to cover unexpected expenses, or to keep you afloat if no regular income is coming in.

Ways to Get Started:

  • Review your budget to determine areas where you can cut down on expenses.
  • Set up direct deposit into you savings account. Saving automatically is the easiest and most effective way to save. Whether saving for an emergency fund, education expenses, retirement or all things in between, by making saving automatic, you will be in the best possible position to reach any savings goal. Setting up automatic savings through direct deposit is the easiest and most effective way to save.

Ways LUSO Federal Credit Union Can Help:

We offer a variety of savings options for you to find the best account for your personal financial goals.

LUSO Federal Credit Union is a not-for-profit, member-owned financial cooperative dedicated to providing members with quality financial services and products. We at LUSO pride ourselves on serving the financial needs of our members and helping them save for the special occasions in life.   

Feel free to contact our Ludlow branch toll free at 1-844-LUSO-FCU or our Wilbraham branch at 1-800-808-5876.

 


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