personal finance Archives - Common Trust FCU

Tips for Making & Sticking to Resolutions

When the new year ball drops, it is the perfect time to turn a new page. The new year can be exciting, yielding opportunities to restart with a clean slate for fresh goals. Personal and fiscal reflection helps you assess where you stand in your shoes to set your resolutions in motion. As you begin to draft your resolutions list, the Common Trust team is offering some tips to kick off a great 2022 and keep you on track to stick to your resolutions.

Limit Your Resolutions List

Typically, humans tend to be harder on ourselves than we need to be. You might have a long list of resolutions, but be kind to yourself and focus on only a few so you do not overwhelm yourself. Self-care is important in reflection, so be sure to cut yourself some slack. Consider starting with a small, actionable goal so you can get into the goal-achieving mode.

Choose a Specific Goal

Many people often set lofty resolutions at the turn of the new year, and this practice makes some bite off more than they can chew. However, it also presents great opportunities to grow and overcome any struggles with sticking to goals.  Setting your mind on one specific, realistic goal helps craft a concrete plan to achieve that goal. For example, if your goal is to exercise more, create an actionable plan and create daily calendar reminders to go for a walk or go to the gym.  Achieving a small goal boosts your self-esteem and helps you tackle things more easily.  If you have a big goal, consider breaking it into manageable pieces and take one thing at a time.

Change up your Resolutions

If you find yourself stuck on one resolution year after year, chances are you have it in your mind you cannot stick to that goal and may mean that you will likely abandon it. So if your resolution in years past was to lose weight, for example, change it to something like just eating more vegetables per week to retrain your mind to embrace a different version of your goal. 

Plan, Plan, Plan

Whatever your goal might be, you need to plan to achieve it – just the thought of an idea won’t be enough. Creating a detailed plan and even using your phone for reminders, tracking progress, etc. will help you manage how you will achieve your goal. Working on a goal without a plan creates a higher risk of giving up if an obstacle arises.

The Buddy System

More often than not, a goal with a friend or family member means you’ll be even more motivated to achieve that goal. Connect with a friend or loved one to see if you both share the same goals and create a method to keep one another accountable. If you make it fun or like a game, you may even find yourself enjoying motivating the other, which means you’ll be more likely to adhere to the plan.

Set One Financial Resolution 

We recommend making one small economic goal that improves your financial well-being when creating your list. Even making one adjustment to your finances means you can put money towards something that makes you feel good– like travel or giving to a charity. Pennies turn into pounds quickly, you will find, and making a financial modification will help you allocate money towards something you love. 

When challenging yourself to change the tides, remember that taking on too much is usually the very reason New Year’s resolutions can fail. Be kind to yourself and create realistic steps to get into the right mindset to create the change you seek. 

As always, Common Trust is available to help you with any of your own personal financial goals. Happy New Year, and we look forward to helping you make 2022 your brightest year yet.

Retirement for Beginners: 5 FAQs about the 401(k)

Getting your first job can be both exciting and scary, especially when dealing with the onboarding paperwork associated with those big financial decisions. This is a watershed moment that most young workers will recognize: According a survey from Fisher Investments, 80% of millennials want to work for companies that offers a 401(k) — yet, only 25% of those working at companies with >200 employees actually enroll in their retirement savings program. 

Why? Though the process seems fairly straightforward, it can get complicated quickly if you don’t understand how the various contributions, penalties, and investments fit together. Let’s take a deeper dive into the 5 most frequently asked questions when faced with your first 401(k) plan and give you the answers you need to start planning for your future today.

1. What is a 401(k)?

In its most basic definition, a 401(k) is a type of Individual retirement account (IRA) into which you contribute money each month. This money can be invested on your behalf into various funds (more on that later) and is left to accrue tax-free until you retire — at which point you will hopefully have a nice nest egg ready to fund the rest of your life. 

2. What is my company’s match?

When you’re choosing the amount you want to contribute to your retirement account, it’s critical to know if your company offers a match. Let’s say you make $50,000 per year. If your company offers a match of 5%, they’re willing to contribute up to $2,500 per year into your 401(k) — but only if you contribute that much, too. If you choose to only contribute 2.5% (or $1,250), you’re giving up an extra $1,250 your company was willing to give you for free. 

3. What is vesting? 

Some companies offer generous matches that are saddled with “vesting” timelines. This means that they could offer a 10% match, but in graded increments based on how long you’ve been with the company. This can affect the amount shown in your 401(k) balance statement; if you’re not fully vested (meaning, if you haven’t been at the company long enough to earn the full amount of their contribution), your account may show more than you actually have.

4. Can the account be moved?

Yes — and this is a critical step in changing jobs. When you end your employment with Company A, you need to take the money from your 401(k) account with them and either move it over to your next employer’s 401(k) account or cash it out with tax penalties. You can also set up a personal IRA (like with Common Trust Federal Credit Union) to house your retirement funds so you don’t have to move them after every job.

5. How should I invest my funds?

A large — and risky — part of the 401(k) account is choosing to invest your saved retirement money. Here are the most common options:

  • Stock funds: Choose the stocks in which you can invest a percentage of your 401(k).
  • Target-date funds: Simply pick your target date for retirement, then pick the matching fund. There’s little maintenance, as the fund adjusts your asset allocation over time.
  • Blended-fund investments: Choose a set ratio of stocks and bonds appropriate for your situation and risk assessment.
  • Bonds/managed income: These can safeguard your money, but it won’t grow much.
  • Money market funds: There’s zero growth, as these funds barely keep up with inflation. 

The choice is yours and can be adjusted over the life of your retirement account, based on your situation.

When you transition from one life stage to another — be it graduation or retirement — it’s a scary move no matter your age. You face new financial decisions, but you just aren’t sure how to make the right choices for your future now that you’re the one in charge of it. What you need is a crash course in financial education designed to help you choose the path using sound information and advice. 

Common Trust Federal Credit Union understands your concerns and offers our Financial Education Center to help you best understand and prepare for new life milestones. Get started today!

Give Feedback