Make SMART New Year’s Resolutions

Everyone–regardless of age–can take steps to shape up their finances.

As you decide on your New Year’s resolutions, think SMART–financial goals that are specific, measurable, adjustable, realistic, and time-oriented.

Here are some examples of financial goals for different generations:

Youth
* Collect your change. Each time you buy something, save the change you get back. Deposit the change in a container at the end of every day. Over time it could add up to a significant amount of money.

* Save your allowance. Whether you want to buy something you’ve been eyeing for months or you want to start saving for college, the only way you are going to do it is by putting your allowance away. Deposit at least part of your allowance in a share savings account at the credit union.

Gen Y
* Open a Roth IRA (individual retirement account) and start saving. Make savings a habit and invest at least 10% of every paycheck for retirement. The longer you have to save with a Roth IRA, the more you save on taxes. Although contributions aren’t tax-deductible, your money grows tax-free and comes out tax-free as long as you meet certain requirements.

* Put your credit card away. Use credit cards only when you know you have the funds set aside to pay the bill in full when the bill comes. Don’t leave a balance on your credit card or you’ll be charged interest.

Baby boomers
* Put your debts in priority order. Make a list of all your liabilities and organize them by the annual interest rate. Pay off those with the highest rates first, while still making at least minimum payments on all the others. Set a specific, realistic date for when you plan to achieve your goal of paying off all debts.

* Determine your net worth. Calculate your assets minus liabilities each year–preferably on Dec. 31–so you quickly can see whether you’re gaining ground or falling behind. Your net worth should be increasing each year. If it’s not, make a plan to improve it, such as pay down a specific debt or put more money into a retirement account.

Seniors
* Evaluate your estate plan. Establish or review your will, advance directives, and powers of attorney, and make sure they reflect your preferences and current situation. Make sure all of your intended beneficiaries are on file for all your financial accounts.

* Check all insurance policies. For example, know what is covered in your homeowners policy and verify your liability coverage. Call your insurance agent if you have any questions.

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Five Things To Do in January

It’s no surprise that January is a big month for making resolutions. And if you’ve been making resolutions for a while, you know how many of them fall by the wayside before February.

These suggested resolutions are different in two ways—they’re in the ‘set and forget’ category, and they can make your life so much easier that you’re likely to keep them:

* Set up direct deposit. Once you arrange to receive regular payments like your paycheck or Social Security and pension checks with direct deposit, you’ll never have to worry about making timely deposits again. You’ll know that your deposit is in your account exactly when you expect it to be.

* Set up automated transfers to savings to pay yourself first. The next smart step, after direct deposit, is to get funds into savings right away so they can begin earning dividends from the get-go.

* Automate your mortgage payment. Even with the typical grace period that most mortgage lenders allow, it’s always a good move to take care of that big monthly payment. Again, you’ll never have to worry about making the payment on time.

* Automate minimum credit card payment or payments. The penalty for a late credit card payment is not pretty. Set up an automated payment to cover at least the minimum due on all your credit cards; you always can pay additional amounts so you retire those debts as soon as you can. Set payments a few days before the due dates to protect your credit score.

* Arrange to have any overdrafts automatically covered from your savings account. Even if an overdraft is rare in your household, it can happen to the best money managers. Make sure you can cover any inadvertent overdraft with a direct transfer from your savings account and there’s another worry you’ll never have again.

If you’ve already managed these resolutions, think of one or two more that could help you get on and stay on the straight and narrow financially. See http://www.hopewellfcu.org or call 740.522.8311 for more ideas.