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7 Financial Resolutions for A Successful New Year

7 Financial Resolutions for A Successful New Year

After enjoying a restful holiday along the lake shore, it’s that time of year where we consider how making changes to our daily habits can have big impacts on our happiness and wellbeing. The beginning of a new year is also the perfect time to evaluate our financial situation—our spending and savings habits—and see how well our tendencies line up with our bigger goals.


We’re dedicating our first post of the new year to promoting a few common financial changes that can lead to improvements, both large and small—whether it’s minimizing money-related stress or laying the groundwork for major accomplishments, like purchasing a first home or retiring with a decent nest egg. While not every resolution on this list will work for each individual, we're sure there’s at least one useful choice on here for everyone. What financial resolution will you take on this year?

1. Cut Spending

Good Housekeeping states creating a balanced budget as their top New Year’s resolution and for good reason—financial stability is key to achieving peace of mind. With high inflation, it can be difficult, if not impossible, to cut back on spending on your living expenses. That’s why it’s important to focus on your discretionary spending when looking for places to trim the fat. Consider these tips:

  • Cut the streaming and subscription services. If you use a service less than once a week, or if you signed up for a free trial and never canceled it, now is the time to end it. Remember that even a small monthly charge can add up—$9.99 a month over the course of the year is nearly $120. Keep in mind that some shopping services, like Amazon, are still available to customers in a pinch, even without a subscription.
  • Cancel your gym membership. While this may seem counterintuitive as part of a New Year’s resolution, if you rarely use your membership, consider it a financial burden, not a fitness incentive. And there’s no need for a trip to the gym to be a barrier to your physical health. Start a walking or jogging routine, pick up a set of affordable weights to keep at home, or consider a cheaper online membership (or browse free YouTube options!) to work out on your own whenever you have a free minute. 
  • Skip the takeout. Eating out is five times as expensive as preparing a similar meal at home, and between ordering and pickup, not that effective of a time-saver either. Instead, take a few minutes to list or discover easy-to-cook meals for those nights when cooking feels like the last thing you want to do.
  • Switch to online banking. Avoid late fees, save money on stamps, and save time on paying bills while staying on top of your finances. Enroll in autopay and utilize your bank's online billpay features. And West Shore Bank’s Money Tracker Tool can help you track and budget your money to help you manage your spending even more! 

Creating a budget and saving more money are among the top financial resolutions - woman with calculator

 

2. Save More Money

Along with cutting spending, saving is a popular new year’s resolution. In fact, nearly half of Americans consider it their top goal, and saving money and cutting spending go hand in hand. So what are the best ways to start a saving routine? Here are a few suggestions:

  • Automate your habit. The easiest way to boost your savings is to automate it by setting up automatic or periodic transfers from your checking account to your savings account. Use our free Steady Saver tool to send a designated amount from your checking to your savings account each month. Don’t have a savings account? Open one today! 

  • Consider a certificate of deposit. With the current higher interest rates on CDs, they make a great tool for combating inflation and making your dollar go even further. Check out our Certificates of Deposit page to learn more. 
  • Choose a money market account for added flexibility. If you aren’t able to lock away all your savings in a CD, you can also consider a Money Market Account from West Shore as another high-interest alternative to traditional savings accounts. While there are minimum balance requirements and restrictions on how many withdrawals you can make each month, they provide greater accessibility than CDs while earning more interest. 

Lowering yoru debt loan can save you significantly on interest charges - person holding receipt

3. Start Building Your Retirement Nest Egg

 If you already have a retirement account, consider ways to boost those savings this year. But if you haven’t started building your nest egg yet, now is the time. Because of the effects of compounding interest, the earlier you start, the better! What are the best ways to save?

  • If your employer offers a 401(k), start contributing ASAP. Saving is easy when contributions are automatically deducted from your paycheck, and most employers offer some form of a match, which means free money for you. At the very least, contribute enough to maximize that match.
  • Small business owner? Set up a Simple Employee Plan (SEP) IRA for your employees, and yourself. Many banks, including West Shore, offer SEP IRAs, an easy and cost-effective alternative to 401(k)s.
  • Have a 401(k) but want to save even more? Or maybe you're self-employed, a freelancer, or don’t have a retirement plan at work? An IRA might be the right choice for you. Anyone can open an Individual Retirement Account (IRA) and enjoy the many tax advantages. To learn more about Traditional and Roth IRAs and see which one would work best for you, check out our Individual Retirement Account page. 

If you’re not sure how to get started, a Wealth Manager can help. Reach out to one of our retirement planning professionals to make a strategy that works for you. 

Planning on buying a home in the near future? Consider improving your credit score - Credit score app on phone

4. Pay Off Debt

If you have accumulated a lot of debt—particularly high-interest debt like credit card balances—it’s a good idea to prioritize paying it off or down in the new year. Lowering your debt loads can save you significantly on interest charges, prepare you for your next financial move like buying a house, and simply give you peace of mind.

When you make a plan to reduce your debt, focus on your high-interest accounts first to make the biggest impact. However, if you don’t have enough income to keep up with the payments on those growing balances, or you are looking for a long-term plan to minimize the impact of interest and simplify your payments, think about getting a debt consolidation loan:

  • Personal Loans for Debt Consolidation: Instead of paying on many, high-interest accounts each month, simplify your payments and lower interest with a Personal Term Loan from West Shore. 
  • Cash out Refinance: Own your own home? Has it grown in value since you purchased it? Consider refinancing your mortgage, pulling out some of that equity to pay off your high-interest debts.
  • Home Equity Loan or Home Equity Line of Credit: Happy with your current mortgage or mortgage rate, but still want to tap into your home equity? A Home Equity Loan allows you to borrow against the equity you have in your home, often at better rates than unsecured personal loans.  

5. Improve Your Credit Score

Planning on buying a house, or car on loan in the coming year or two? If your credit history has some rough patches, or if you haven’t yet established credit, you may want to work on building good credit and improving your score. For instance, the minimum credit score needed to buy a house is 580 to 620, but for a conventional home loan with a competitive interest rate, you'll want to aim higher. Some simple ways to improve your credit include:

  • If you have never had a credit account before, start by applying for a basic credit card. Until you get used to using credit for purchases, limit what you choose to buy using the card. For instance, you can choose to only use it for gas purchases or set a maximum amount you want to spend each month.
  • If you have missed payments in the past, make a resolution to start paying on time, each month, even if you can’t pay off the balance in full. Set up autopay for at least the minimum payment and then pay off more, as possible. The more recent payments have a higher impact on your credit score, so it’s possible to improve your score within a few months of on-time payments.
  • Pay down your balances. The larger your credit utilization rate (i.e., how much of your available credit on an account that you’ve already used), the lower your score will be. If you’ve maxed out a card, focus on paying that one off first.
  • Speak to a credit counselor. If you need help managing your debt and rectifying past credit mistakes, it never hurts to reach out to a certified credit counselor. West Shore Bank partners with GreenPath Financial Wellness, a trusted national nonprofit with more than 60 years of helping people build financial health and resiliency. Contact a West Shore Bank employee for more information or GreenPath directly at (833) 771-0844.

For more information on financial wellness, check out the video below on tips for maintaining financial wellness.


 

6. Estate Planning


Most Americans—67%, in fact—have no estate plan. And executing an estate without a will can be a long and drawn-out process, a burden your loved ones shouldn't have to bear in their time of grief. End-of-life plans aren’t just about distributing assets after your passing. They can include living wills and medical directives, as well as trusts to help ensure your wishes are followed should you become otherwise incapacitated. 

At West Shore Bank, our Estate Planning and Trust advisors can answer your common questions about end-of-life planning and estate settlement, and assist you in developing the right path for you and your family.

Watch this quick video on seven basic steps in estate planning.


 

7. Try a Digital Wallet


If you’re feeling pretty good about your financial picture, or want to set a smaller, more manageable resolution, setting up a digital wallet is a simple financial move that can help modernize your money management. Using a digital wallet has many benefits over a traditional one:

  • Enhanced security through end-to-end encryption
  • Never worry about your card being lost or stolen
  • Easily make payments online with stored credit card data
  • Just tap your phone at contactless payment terminals at your favorite stores for quick, easy checkouts

Your credit and debit cards from West Shore can work seamlessly with the top choices in digital wallets including Google Pay, Apple Pay, and Samsung Pay. For easy directions on how to get started with any of these popular wallets, visit our Digital Wallet page or watch this short video. 

Start the New Year Right with West Shore Bank


West Shore Bank has been serving Michigan communities since 1898 and we’re committed to helping you improve your finances for this year and beyond. With convenient branches throughout West and Northern Michigan in Ludington, Hart, Scottville, Onekama, Frankfort, Manistee, and Traverse City, our financial professionals are never far away, and are happy to answer your budgeting, saving, and estate planning questions. Call us or stop by one of our locations today to get started on your New Year’s financial resolution!


 

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