As this year comes to a close, you may be looking forward to setting new goals for 2021. Whether you are establishing a new fitness regime or dedicating more time to your education, it’s important to think about what you want to achieve financially in 2021 as well. We’re bringing you a list of top five resolutions to consider that are intended to set you up for success in 2021 and for many years to come!
1. Pay off debt.
No matter how much effort you put toward raising your credit score or building substantial savings, your financial status is only as good as the debt you carry. In order to achieve financial stability, you should set a goal to pay off all pesky debt.
Start by setting a strict budget and making a commitment to your savings goals. Next, take a month by month look at your budget, detailing all bills and crucial payments, making note of any that are not essential. This is an opportunity to identify unnecessary spending.
After bills, groceries, and urgent payments have been deducted, budget out a reasonable portion of your funds to put towards whatever open accounts you have. Start with the account with the highest balance, and make your way down the list until all balances have been paid off. This process requires a lot of willpower, but will ultimately lead you toward a debt-free 2021, better credit, and so much more.
One other strategy to consider for paying off your debt is to take out a personal loan or debt payoff loan. To be sure, you’ll want to carefully evaluate these loan options with your financial institution—you don’t want to end up in more debt while trying to pay off debt. However, the right debt payoff loan, when vetted by a financial team you trust, can be a valuable way to eradicate your debt and start saving more.
2. Open another savings account.
Meeting your financial goals becomes easier when you have multiple savings accounts. These club accounts serve as piggy banks for each of your goals. Plus, watching your savings grow and getting closer to your goals with each transfer is a great way to stay motivated and keep yourself on track. Within your budget, you can determine what percentage of your savings should go to each account, and split up your funds according to goal timing and need. Either way, having any amount of money in your back pocket is a great way to stay financially secure and stable in case of emergencies.
3. Build better credit.
You can save a huge percentage of your paycheck every month, but no amount of savings will hold up against bad credit. If you’ve been neglecting due payments, accumulating debt, or using too much of your line of credit, 2021 is a great time to hone in on your credit score. Your goal can be as simple as paying off the monthly minimum payment for each of your accounts or as big as paying off an entire account balance. Small progress will go a long way in building your credit. Plus, having better credit comes with a variety of benefits, like allowing you to take out larger loans to make bigger purchases.
4. Invest in your future with a personal loan.
When used responsibly, loans are a great investment to help build the future you want. Whether you’re looking to pay off debt, purchase your dream home or car, or access funds for a special project, personal loans are a great way to build credit and financial responsibility. Plus, a loan will allow you to get the funds you need upfront and provide time to pay it off. Be sure to make your payments on time and your credit will flourish. As your credit grows, you’ll be eligible for longer repayment periods, better interest rates, and higher loan amounts.
5. Consolidate your debt.
While having multiple credit cards and accounts is a great way to build credit, it can be a lot to manage. Missed payments and high-interest rates can lead to a snowball effect on your credit, and could leave you worse off than you started. If you have multiple accounts with various levels of debt, it may be time to consolidate with a Debt Consolidation Loan or Credit Balance Transfer. The concept is simple—use the loan to pay off all accounts, and then simply make payments to one single loan with one single interest rate. Managing one loan account is far more simple, and will allow you to pay off larger chunks of your principle rather than spreading your funds across multiple accounts.
How can I make this the best year yet?
Ready to build achievable financial New Year’s resolutions? The Common Trust Federal Credit Union team is here to help you assess your current financial status and build a plan that works best for you. To learn more about your options and get the opinion of our experts, give us a ring or reach out via email today!