The new year is a great time for goal setting and your financial goals should be included. Good financial habits will help you in the new year and in the long run towards maintaining financial security and peace of mind. Here are some practical financial tips to help you get the new year started:

1) Set Smart Financial Goals

Typically, you have short-term and long-term goals. Whether it’s saving for a new home, vacation,
paying off high-rate debt, or saving for retirement, having specific and measurable goals will give you something to work toward. Your goals should be SMART: Specific, Measurable, Achievable, Relevant, and Time-bound.

2) Create or Reevaluate Your Budget

Track your expenses: Know where your money goes each month. Use your Connects online banking or mobile app to review your spending and monthly bills. Set categories such as housing, transportation, food, savings, and entertainment. Once you are clear about where your money is going, you can adjust as necessary to avoid overspending.

3) Cut Back on Unnecessary Expenses

Review any subscriptions you may no longer need or use, such as streaming services, gym memberships, or app subscriptions. Shop around for better rates on services like cell phones, internet, or insurance. Sometimes negotiating with your current provider can lead to savings. Even cutting small amounts can add up year over year.

4) Have an Emergency Fund

Ideally, save 3–6 months’ worth of expenses as a financial cushion in case of unexpected events like job loss or medical emergencies. Even consider payment protection or mechanical warranty if you get a car loan to help from being blindsided by sudden income loss or a major repair.

Automate savings: Using tools in online banking, set up automatic transfers to a separate savings
account to grow your emergency fund without thinking about it.

5) Pay Off High-Interest Debt

Focus on high-interest debt first: If you have credit card debt, payday loans, or other high-interest
liabilities, prioritize paying these off as quickly as possible. You may want to consider refinancing high-interest debt in a lower rate card, like the Connects FCU credit card.

Or consider the debt snowball method, paying off the smallest debts first. Then put those payment amounts towards the next debt. Paying more than the minimum pays the debt down faster.

Choose the one that suits your personality and financial situation.

6) Contribute to Retirement Accounts

Take full advantage of your 401(k), IRA, or other retirement accounts. Contribute enough to get any
employer match, and if possible, try to max out your annual contribution limits. If you need to start
smaller, that’s okay, just start and make automated deposits.

7) Plan for Taxes

Tax time comes every year, be sure to make a sensible plan for any tax refunds, such as adding to your
emergency fund or paying off a debt. If you typically owe taxes, this item should be in your budget.

8) Review Your Credit Report

Use the Savvy Money service in the Connects FCU online banking and mobile banking to evaluate and
get educated on your credit score. If you’re aiming to improve your credit score, focus on paying down
debt, making timely payments and credit utilization. This will benefit you if you’re planning to take out a
mortgage, car loan, or any other form of credit.

9) Focus on Increasing Your Income

Explore part-time opportunities or a side hustle that can provide extra income. Consider freelancing,
tutoring, driving for rideshare companies, or selling handmade goods online.

If you’ve been in your job for a while and feel your work performance is strong, consider asking for a
raise or exploring other job opportunities that offer better compensation.

Managing your finances takes some work and is worthy of attention. Understand your income, your
expenses and spending by focusing on a budget and your goals.