A new year means a fresh start. Even if you set goals and missed the mark last year, you can start again. Many of us set goals to get fit – physically fit. Some spend a lot of time and money planning meals, paying for gym memberships and personal trainers, all with the hopes of losing weight and getting in shape.

But another important fitness goal is your financial fitness. If you’ve set a goal to get your finances in order this year, Members Trust is ready and able to help you reach your goal with these SIX steps.

1. Where are you now?

Before you can set a goal for where you want to go, you need to know where you are so start by assessing your assets and liabilities. Look at your savings and investment accounts, including your retirement accounts. Also, include assets such as your auto and home.

Next up is to look at your liabilities or debts that you owe. Things like your mortgage, auto loans, credit card bills, etc.

Total up your assets and subtract your liabilities to get your net worth.

2. Create a budget.

Very few people are budgeting fans but like it or not, it’s important. A budget gives you a clear picture of where you spend your money each month.

• Total your income.
• List all of your expenses by category and total.
• Subtract your expenses from your income.

Pat yourself on the back if that number is positive. If not, you need to figure out where to make cuts. A budget helps you pay for all of the needs firsts and wants second.

3. Pay off your debts.

No one is saying this is easy, but a budget helps you make the minimum monthly payments and see where you have a little extra money to make an extra payment (or two) to get debt free.

The most popular method is the snowball approach where you select one bill to pay off. When you are done with that one, take that payment and add it to another debt to pay off. And so on until you are debt free.

Another option is to consider a debt consolidation loan where we can help you condense your payments into one, more affordable payment to help you save money.

4. Build your emergency fund.

An emergency fund can actually keep you from accruing more debt when an emergency happens. Plus, it gives you added peace of mind knowing you are prepared for the unexpected.

Experts recommend that you save 10% of your paycheck; however, look and your budget and do what is comfortable for you. Just remember that you should make a habit of “paying yourself first” which is easier if you set up automatic payroll deduction!

5. Plan for the holidays.

Let’s face it – the holidays are expensive and as a result, derail many budgets and increase credit card balances. Run the numbers to see what you normally spend on the holidays and set a realistic budget for 2023. Once you know how much you need to save, open a Christmas Club account where you designate a specific amount to go into this account automatically, to be ready for the holidays. Payroll deduction makes this fast and easy!

6. Build in a cheat day.

Even fitness gurus give themselves a cheat day every now and then and you should too. If you occasionally have some extra money, it’s okay to use it to treat yourself instead of paying down a bill or adding it to your savings account. But cheat days are not every day or every week – just occasionally and only if you are on your way to paying down your debt and building your emergency fund.

Members Trust is ready to help you get financially fit. Talk to us today!