A New Year with New Goals- Step out of the Shadow of Spending and Spring into Savings
Family Promise- February 2022 Newsletter Written by Jeff Corby, Americhoice Federal Credit Union
The story of Phil and his shadow is one of hope and reflection. If he sees his shadow, then there is six more weeks of winter. If not, then spring is coming. Either way, change is coming. The idea of a longer winter means that there is more time to prepare for what lies ahead. No matter what happens, the idea of spring means change, which brings with it something new or different. A great way to change some of our old habits is to create new goals for ourselves.
Goals allow us a chance to be prepared for the often-quick changes that are looming in our future. At Family Promise, we focus our efforts on the future. Some families find themselves in hardship for a variety of reasons. Plenty of people who aren’t living in poverty also make financial mistakes along the way. We all have more we can learn. Regardless of why a financial hardship exists, Family Promise can work with you to help guide you to a brighter financial future.
Check 1,2,3 takes our families through basic financial literacy skills. We work with banking experts to align our families’ goals with their behaviors to successfully achieve fiscal literacy and health. If you’re also looking to improve your financial habits, here are some tips and tricks to get started:
Analyze your financial situation.
One very important goal that can help prepare you for the future is to have good savings habits. In order to develop a great saving strategy, first take a look at what you are spending and saving right now. Start with short-term goals and work your way into longer-term goals. As with anything, you cannot figure out where you are going if you don’t know where you are starting.
Create a budget.
A great tool that can help you determine what you are spending versus saving is to create a budget. A budget is a simple way that you can get a snapshot of all your current spending and saving habits. First, start with your income or any money that you having coming in. Does it come to you all at once, or does it come in installments like a paycheck from your job? Once you know the total amount coming in, then track what regular bills you have to pay. This may include things such as rent, utilities, medications, childcare, groceries, ect. Only look at what is absolutely necessary to survive for now. These are your needs. Subtract your needs from your total income. What you have left over is what you can decide to spend on your wants or put into savings.
Adjust income or expenses as needed.
Maybe your bills are more than your income. If this is the case, you will need to figure out how to cut out some of the needs or add more income. Maybe you need to pick up a second job or find a way to get help in covering some of those needs.
Make a monthly savings goal.
Once you have determined what is left of your income after your bills are paid, it is helpful to pick a specific amount to save. Start out small. Maybe you can only save five dollars a month, maybe twenty, maybe one hundred. Everyone is different. Make sure that the amount you choose to save is actually possible.
Make a total savings goal and identify your “why”.
After your needs and savings are accounted for, the rest of your income can be spent on your wants. It is very important to make sure that your savings and your needs are always taken care of before you spend on your wants. Once you have started a healthy habit of saving and have built up your nest egg, you will have to decide what to do with it. Start with a goal for a rainy-day fund. Pick a specific amount you want to build your savings up to: maybe its five hundred dollars in case the car breaks down or a security deposit on a place to live. Whatever you choose, stick to your goals. If you reach that goal, start a new savings goal.
Evaluate and adjust.
Make sure to constantly evaluate your goals. If you have to use your savings for something, then how can you work towards replenishing it? Revisit your budget every month. Do you have new bills? Can you cut some needs out? Can you afford to save more? Keep in the habit of tracking everything that you spend and save. Know where all your money is going so that you can decide if you want it to go to something different.
Family Promise offers our Check 1,2,3 program that takes an in-depth look at financial literacy and can help you take specific action steps in order to reach your financial goals. By making a budget and developing good saving and spending habits, you can step out of your own shadow and spring into a new year in order to reach all of your goals!