How to create a money plan for the new year
Making New Year’s resolutions is easy. Keeping them is another story.
If you want to make meaningful, lasting changes this year — especially when it comes to your financial wellness — a money plan can help you get there.
A money plan is your financial itinerary for the coming year. It tells you how to get from point A (where you are now), to point B (where you’d like to be next year).
It helps guide your spending decisions and keep you focused on your goals. No matter where you are in your financial journey, a money plan can help prepare you for the challenges ahead while paving the way for the future you want.
Having a money plan is especially important in times of economic uncertainty. The pandemic has changed a lot about the ways we live, work and spend — and things are still changing. While it’s impossible to predict what the new year will bring, there are a couple of things we know about 2022:
- Prices are expected to continue rising with inflation.
- The Federal Reserve plans on raising interest rates to keep inflation low.
So, what does this mean for your money plan? First off, if you don’t have one yet, now is the perfect time to start; our team is here to help guide you through it. If you already have a money plan in place, it’s a good idea to re-evaluate it for the coming year.
STEP 1: Set your 2022 money goals
Every strategic plan starts with a goal. Where do you want to be in a year? Any big life events on the horizon? Are you looking to pay down debt, save up for a home or take your career in a new direction?
It may be that your goal is simply to stay afloat for 2022. If that’s where you’re at, it’s perfectly OK — you’re not alone.
STEP 2: Set your priorities
Most of us have multiple financial goals, and sometimes it’s hard to know which ones we should focus on. Your own priorities will be unique to your situation, but there are a couple of things everyone should consider for 2022.
Shedding high-interest debt: With as many as three federal interest rate hikes on the horizon, your debts are likely to become more expensive in the coming year. It’s a good idea to plan on pay them down as much as possible. You might want to consider taking out a debt consolidation loan with a lower interest rate to help speed up the process.
Padding your savings: As inflation drives up prices, you may need to lean on your savings this year to compensate. And with the pandemic still lingering, you’ll want to replenish (or start) your emergency fund. Consider using our Ignite Savings account to jumpstart your emergency savings.
STEP 3: Track your spending
It’s important to know where your money is going so you can make sure it’s going to the right places. By tracking your spending, you can identify leaks in your budget and redirect your funds into the priorities you identified above. The easiest way to monitor your cash flow is to use the Financial Wellness feature in your MyOCCU Online & Mobile account. You’ll have a clear snapshot of your spending right at your fingertips, whenever you need it.
A money plan is a valuable tool no matter what your financial picture looks like. It can help you stay on track, improve your financial wellness and make progress toward the goals that matter most to you.
