Articles - Archived Money Matters

New Year's Resolution: Shape Up Your Finances

It may not be the most popular New Year's resolution, but it's definitely in the top five. Right up there with losing weight and quitting smoking, each year millions of Americans vow to shape up their finances, whether it's make more money or get out of debt. If this is you, try these five tips to help ensure success.

Create a budget. Take a good look at your cash flow to determine how much is coming in and going out. Once you determine how and where you're spending money, you can identify which areas can be trimmed.

Prioritize debts. Make a list of your debts and organize them by their annual percentage rate (APR). Instead of making a small dent in each, try pay off the one with the highest APR first (most likely a credit card) while making minimum payments on the others. Once it's paid off, focus on the next highest.

Save more for retirement. If you haven't started putting money away for retirement, start now! If your employer offers a retirement plan, take full advantage of it. If you already contribute to retirement, whether through work or an individual retirement account (IRA), consider increasing your contribution (especially if you get a raise—you won't even miss it)!

Create a rainy day fund. An emergency supply of cash will come in handy should you lose your job or have unexpected costs arise. As a guide, you should have at least three to six months of your income in the form of cash available for times like these.

Make a will. Creating a will establishes what happens with your money, property and children when you die. Don't let someone else make those decisions for you. Take charge!

Need more help? If you are a local government employee—and thereby eligible to join Local Government Federal Credit Union—you can speak with a financial counselor at no cost. Just call 877.367.5428.