Key Takeaways

• • • • The New Year is a perfect time to make financial decisions that will benefit you all year.
      • Set up a budget or review your existing one.
      • Track your spending to see where your money goes.
      • Start or adjust your savings plan for the future.
      • Take control of your credit card balances.

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    January often sees New Year’s resolutions fall by the wayside, whether it’s losing weight or cleaning out the junk drawer. Follow the steps below to transform your financial resolutions into lasting habits.

    What’s Your Plan?

    Your financial plan is more than just a budget—it’s a roadmap to where you want to be financially. Set specific goals with manageable steps to help you reach them without feeling overwhelmed. Give yourself small rewards along the way to stay motivated.

    Review (or Create) Your Budget

    Look at your budget and see if it still works for you. Make adjustments if you’ve had changes in income or family needs. If you don’t have a budget yet, now is the perfect time to start. Begin by listing your monthly income and expenses. Add savings amounts for emergencies, short-term goals and retirement.  Try allocating 50% of your income for essentials (like rent, gas and food), 30% for non-essentials (like entertainment), and 20% for savings.

    Track Your Spending

    Track your spending by recording everything you buy. At the end of the month, you’ll have a clearer picture of where your money is going and might find areas where you can save, like takeout coffee or extra subscriptions.

    Review Your Savings Plan

    Take a look at your savings and adjust for the new year. Start with retirement—look toward increasing your 401(k) deduction if you have a company plan. Be sure you’re taking advantage of the company match, and remember that these savings are pre-tax, so they could lower your overall income tax liability. (Always consult your tax advisor.)

    Next, look at your emergency fund savings. If you don’t have an emergency fund, now is a great time to start. Try an automatic deduction into a savings account to reach $1,000. Over time adjust your plan regularly until you have savings to cover three to six months of income. You can easily set up automatic deposits into a savings account at Lake City Bank for easy saving.

    And finally, set a goal or two for shorter-term savings. You can use a feature like Goals* in Lake City Bank Digital to save for a trip, a car or just about anything else. Simply enter the amount you need to save and the date you need to save it by and Goals helps you set up automatic transfers to make sure it happens.

    Manage Your Credit

    January is a great time to review your credit card balances. Try to pay down any holiday debt and focus on paying more than the minimum. You could start with the highest-interest-rate card, or look into debt consolidation options to simplify payments.

    New Year, Smart Choices

    Taking these small steps now can make a big difference later. Use the New Year as a chance to set good financial habits that you can stick with all year. A little effort now can lead to lasting financial health and security.

     

    *Goals, as referred to herein, constitute the Goals Account described in Section E Investment Accounts of the Personal Account Terms and Conditions.