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The start of a new year is the perfect time to reflect on what’s working well, and what’s not, when it comes to your financial wellness.

Now is a great opportunity to make some changes, so set aside some time this new year to re-evaluate your money situation, set new financial goals, and make some mindset changes that have a positive impact on how you view your money. This can help you avoid some of the most common financial mistakes.

If you’re looking for some new ways to save more money this year, pay off debt faster, or make some new financial resolutions, here are a few tips to help you get started.

1. Give Your Finances a Yearly Checkup

A yearly checkup on your finances is an ideal way to see how close you are to reaching your existing goals and find areas that might have changed throughout the previous year. What you discover here can have a significant impact on the next 12 months and help you determine what needs to change.

If the thought of reviewing your last year’s spending fills you with dread, make the experience more fun. Put on some of your favorite music in the background or take yourself to a local coffee shop for a change of scenery.

For those who like to create a budget on paper rather than digitally, get creative and decorate your paper with stickers or use different colored pens to make your budget more exciting to look at.

2. Save More Money

If you want to save more money this year, now is a good time to think about how you can make that happen. Think about where you need to prioritize saving—do you need to make a new emergency budget or rebuild some savings you’ve drained this year? Or do you want to think about more strategic ways of savings that can earn you more interest?

Start by evaluating your current savings strategy, where it’s worked well and where it hasn’t. Review your previous budget and where you could make some cuts in your expenses to have more money to put into savings each month.

Automating your savings can be a good way to encourage healthy savings habits and remove the temptation of spending all your hard-earned cash straight away. Even better, investing some money into a certificate of deposit (CD) account for a fixed amount of time can earn you a good amount of interest, all while keeping a portion of money to one side that you can’t touch until the CD maturity date.

3. Start Saving for Retirement

No matter how old you are, thinking ahead about how you can save for retirement is always a smart financial move. As of 2022, almost half of American households had no retirement savings at all. With many employer-sponsored plans like 401(k)s offering matches up to a set amount, there’s literally free money on the table going to waste.

If your employer already offers a sponsored plan, it’s worth considering opening an IRA alongside this with a local financial intuition like Citizens Savings Bank. With annual contribution limits of $6,000, there’s room to add to your retirement savings and benefit from the tax advantages now, along with anything you’re saving through a work plan. Learn more about how to start saving with an IRA. 

4. Improve Your Credit Score

Thinking about how you can improve your credit score this year is one step you can take to benefit your future self. Having a good credit score opens you up to better loan rates in the future, higher chances of approval, and the possibility to take out more credit if you need it.

There are several key ways you can improve your score, such as lowering your current credit debts or increasing your limits to improve your credit utilization ratio (under 30% is what you should be aiming for). Making your loan payments on time and paying down balances all help move you towards higher credit scores.

5. Lower Your Debt

Having some debt is not always a bad thing. Loans like mortgages are viewed as “good debt” by lenders as most homes will go up in value as you pay down your outstanding balance. In many cases, you can deduct the interest you’ve paid on your mortgage come tax time, so having debt like this can be useful.

However, other debts like consumer loans and credit cards can quickly become bad debt if they’re not managed properly. You should always focus on how you can pay off debts like these as quickly as possible, as they often come with higher interest rates which means you’re paying more than you should the longer you have that debt.

Big debts like student loans or car loans may take longer to pay off, so prioritize your smaller and higher interest loans first. Consider different ways you can lower debt this year, like taking out a single personal loan to consolidate multiple debts for a better rate, or leveraging the equity you’ve built in your home to take a home equity loan. You could also refinance your mortgage if current interest rates are better than when you took out your original loan.

If a loan isn’t the best option for you, there are many other ways you can pay down your debt. Increase the amount you put towards outstanding balances each month until they’re cleared and adjust your budget to find areas where you can save and put those savings towards paying off debt. You could even look at picking up a side job to increase your income and pay down debt faster.

6. Create a Budget

Budgets aren’t only for people who struggle with their money. Learning how to create a budget that works for you can help you meet your financial goals faster, which is ultimately the goal for everyone!

If you don’t currently have a budget that you’re working from each month, now is a great time to start. For anyone who wants to stay on top of their finances, having a budget written down can keep you accountable and help you see where you may be overspending.

7. Think About Financial Goals 

When you’re creating your budget and reflecting on what you want this year to look like, think about any big or important money milestones you may have coming up.

If you’re hoping to buy a home, refinance your house, remodel, get married, have a baby, start a business, or even retire, these are all big life events that have a significant impact on your finances and need to be planned for.

Citizens Savings Bank Is Here to Help

At Citizens Savings Bank, we want to help you start off the new year right. Whether you’re looking to save more, find a loan that’s right for you, or simply want to know more about your financial options, our team is here for you.

Not sure where to start? Contact us or stop by a branch to tell us your goals and we’ll figure out what products are the best for your needs.

Citizens Savings Bank has multiple locations throughout Lackawanna, Wayne, and Monroe Counties. For branch locations and hours, visit our website. We also have a Customer Support Team ready to answer any questions you may have. Call us today at 1.800.692.6279 or email [email protected]. Member FDIC. Equal Housing Lender.