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Time to refinance? Want to open a new savings account? Wondering the best places to invest your money? American Airlines Federal Credit Union’s Financial Wellness program offers members resources to help build a solid financial foundation.
Here are some habits to help limit spending and be more mindful about where your money is going.
Elizabeth Warren popularized the 50/30/20 budget plan in her book All Your Worth: The Ultimate Lifetime Money Plan. The plan advises consumers to divide their income with 50% toward needs, 30% toward wants and 20% toward savings. That’s a good foundation, but your new goal is to save more than you spend. Start by listing your monthly fixed costs first, including rent, electric/gas and water/trash pick-up. Next, set a goal for ideal spending on groceries and fuel costs. Remember these costs have significantly increased over the past two years. Be conservative, but also realistic. Be sure to budget for unexpected costs and an occasional night out. Most important: Stick to the budget.
Using a shopping list at the grocery store helps battle overspending due to whim and hunger and provides a meal blueprint for the week. Making a list for bigger items, like new furniture or additions to your wardrobe, allows you to think through what you really need and limit emotional purchases. The pandemic shifted consumer options for convenience: Try prebuying your listed items and then picking them up. Add you debit card to the merchants’ site for added convenience. It’s recommended to use one card for all online purchases for better tracking.
Now is the perfect opportunity to reduce how much you owe on credit cards, mortgages and auto loans. As consumers look to save money, you can also look to boost cash flow. Consider cleaning out the closet and selling off items. Turning old furniture, electronics or household goods that you are not using into cash can boost your bank account. Debt-consolidation is also an option. Every little bit that you can trim off your monthly expenditures will set you up for success.
The Federal Reserve will continue to increase interest rates to try to curb inflation. This means the adjustable rates on some of your credit cards could increase. Pay off what you can now and try not to add to debt. Or transfer debt from a high-rate card to a lower-rate card (such as the ones offered by the Credit Union). See Habit 1.
Be aggressive. Do (at least) weekly check-ins for keeping on track and accountability.
Unless you have an urgent reason to pull money out of your investments, let them ride the market wave. Market investments are big-picture investments and will rebound when the market settles.
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Equity is king
The current market has opened additional demand for Home Equity Lines of Credit, or HELOCs. These loans give homeowners access to the additional equity in their homes and can be used for remodeling or renovations, meeting current financial demands or funding other endeavors.
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Out with the old
One of the things I love about the beginning of a new year is the idea of endless opportunities. We’re continuing to make improvements to better serve you while helping you plan for whatever comes tomorrow.
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Spend smarter
Despite many households tightening their belts during the COVID-19 pandemic, America’s largest financial providers report that debit and credit card spending levels are up over pre-pandemic levels — to the tune of nearly 20%.
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College budgeting 101
Developing good spending habits while off at school is an important life lesson
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Home matters
There are steps you can take to upgrade or renovate your current home and make it more modern, functional or comfortable — or all three. By adjusting areas that need the most attention, you can give your home a renewed feel without having to relocate smack in the middle of a housing boom.
