It’s finally time to put 2022 in the rear view mirror and focus on 2023 and its fortunes. The start of a new year often brings us a sense of starting something new: a clean slate and sometimes, a clear wallet coming from the holidays. Funnily enough, we’ve all said to ourselves this year would be different. Some of us have been saying it for the past 10 years, but who’s counting? However, this year will be different as myPSFCU will be here and ready to help you with 10 financial tips for your New Year’s Resolution to make your 2023 your “Financially Well” year.
#1: Take Advantage of Higher Deposit Rates
It is no secret that rates have been and are climbing. According to Jerome Powell, Chair of the Federal Reserve of the United States, the central bank will likely have to keep its benchmark rate above 5% all through 2023 and into 2024. Meaning rates aren’t going back to 2019-early 2020 levels. But it’s not all doom and gloom! This also means a lot of financial institutions have raised and might still raise their deposit rates, particularly high-yielding certificate rates. As Investopedia described it, A certificate of deposit (CD) is a savings product that earns interest on a lump sum for a fixed period of time. When rates go up, consumers tend to hold onto their money instead of borrowing. And a CD is the perfect product for people who want to see their money earn and grow more than a typical savings account. The downside is most CDs must remain untouched for the rest of their term or risk penalty fees or interest loss.
That is why our certificates are suited for your financial journey! Our rates can go up to 3.50% in as short as 7 months! If you are not sure how much money you should put in a CD, ask a financial expert from our myPSFCU team. We will be here for you, especially when it comes to your financial wellness.
#2: Keep Track of Your Expenses
Have you ever been surprised to see your credit card bill at the end of the month thinking how did you even spend this much on online shopping? Turns out, you are not alone! According to Finder.com, Americans are 40% likely to use a credit card when making a purchase. That’s a lot of people! And on top of that, 65% of Americans don’t know how much they spent last month. This 2023, your goal is to belong in the 35% of Americans who know their expenses, and the best way to do this is to track where your money goes!
There are a lot of apps in the market designed to help you track your budget. Luckily, your myPSFCU debit card comes with an access to Mint, QuickBooks®, and Quicken®! To get started, simply follow the steps in the said app. You should be done within 5-6 minutes!
#3: Check Your Credit Health
Almost everyone has something in mind when they hear the words “credit score”. But whether you have a lower than average score or belong to the top 1%, it is still a good habit to check your credit health at least every month. According to Experian, the 2021 average FICO® Score in the US is 714, a big climb from the 689 average in 2011. And when you dig deeper, age plays a huge factor, with people ages 57 and above having an average score of 750 and Millennials and Gen Z (age 18-40) having an average score of 680. It makes sense since your credit age is another factor in determining your score, and a lot of young people don’t know this and end up opening too many accounts and closing their old ones.
Don’t worry, we’re here to give you some helpful guidelines on keeping your credit score in the healthy range!
- Don’t close your oldest accounts – lenders typically like to see that you have experience using credit responsibly and that means having a longer credit age. Tip: improve your age of credit over time by keeping your accounts open and in good standing.
- Always pay on time – payment history is arguably the most important factor in determining your score. A 100% on-time payment history is a good sign for lenders that you can reliable make payments. Tip: Always be mindful of your due dates! Even one late payment can hurt your credit health.
- Keep your credit balances in a healthy range – rule of thumb is to use less than 30% of your credit limit. Tip: when it comes to paying off your credit card debts, try prioritizing those balances with interest rates than those with 0% rates. But make sure to pay the minimum balance required!
- Avoid derogatory marks – Credit Karma considers derogatory marks having a high impact on your score. These can stay on your report for 7-10 years! Tip: Ask a myPSFCU representative for resources on how to deal with your debt. We are always looking for ways to help our members!
- Check your credit score at least once a month – there are a handful of ways to check your score without negatively affecting it. Our myClub & myPremium Checking Account comes with a handful of benefits and perks, including a credit score tracker, so you can have the right financial tools at the right time.
If you need more resources with your credit health and financial journey, we are ready to help you!
#4: Plan Your Retirement Early
Ever wondered how some retirees are traveling on a cruise ship all year round? They might have started planning their retirement early. Investing in your retirement plan early gives you a lot of benefits. One, you won’t have to rush putting in bigger contributions in hopes of having a good retirement package. Two, it will give you a sense of security and peace of mind knowing you are already investing for your future. A 20-year old will only have to save $2,000 a year to reach $1 million by age 65, compared to $9,000 for a 30-year old and $18,000 for a 40-year old. Compounding is very powerful, and starting early gives you that flexibility later on in life.
Our partner, Tom Buckley, will be more than happy to walk you through your retirement plans.
#5: Take Advantage of Coupons, Rewards, and Discounts
It is not something to be ashamed of! A recent study showed online coupons can save a shopper around $1,465 a year. That’s a lot of money saved just by simply using promo codes. Also regularly check your promotions folder (if your email account has a separate folder for promotions) for interesting discounts and offers. Especially before making a purchase, you might find a promo code or two!
Other financial institutions also offer rewards such as cash back and discounts with partners and businesses. Our myClub and myPremium Checking Account gives you these perks and benefits so you can save more money this 2023.
#6: Be On The Lookout For Promotional Loans
We get it. Sometimes we need the extra help with our bills. And with loan rates increasing all across the board, promotional rates are more popular than ever. Especially when you need the cash, a promotional loan can help you with your short-term finances such as holiday expenses, upcoming bills, and taxes. According to Nerdwallet, an excellent credit score will get you an average of 10.60% APR in today’s rates. That’s higher than the 9.30% average in 2021. So when you think about it, promotional loans will help you manage your expenses better compared to regular personal loan.
And look no further! myPSFCU is ready to offer Holiday Cash with rates as low as 6.99% APR and apply up to $2,000. Just in time for the holidays!
#7: Plan Any Big Ticket Spend in Advance
Are you planning on buying a new house in 2023? An electric car? You might want to make some plans before purchasing! According to Credit Karma, knowing what lenders look at before buying a home is the first crucial step in the process. These include your FICO® credit scores and credit history, down payment amount, list of assets and income, bank statements and tax returns, and more. It is also better to know your credit score through various apps first before letting anyone do a hard check, as this will appear on your credit report. The same goes with buying a car!
It is also good to know what the housing and car market currently looks like. Bankrate predicts rates will still go up in 2023 due to continued inflation, overall higher interest rates, a potential recession, and geopolitical tensions. But don’t let this stop you from getting the help you need! We offer webinars from time to time to help our members know more about the market, and have the chance to ask questions and get insightful answers from our expert partners. We want to make sure you are taken care of in every stage of your financial journey this 2023.
#8: Try Practicing the 50/30/20 Rule
50% living expenses, 30% for your wants, 20% savings: the simplest way to budget. This goes perfectly well with our tip #2 of keeping track of your expenses. The 50% of your monthly earnings will go to your needs: housing, groceries, utilities, health insurance, transportation, loan payments, child care (if any). Some would say 30% will go to housing, but it still depends on where you live. The next 30% will go to your wants: hobbies, dining out, vacations, gym memberships, subscriptions, movies, concerts, etc. We still think having a healthy balance of fun and doing things you enjoy is essential, but won’t drain your bank account. That is why it’s good to take note of your ‘wants’ budget. And lastly, 20% will go to savings: your 401k, emergency fund, and other investments. If you have debt, you can also dedicate a part of your savings to making additional payments, especially with high-interest debts such as a credit card or auto loan. Getting out of debt sooner will free up space in your future budget and save you money on interest payments.
#9: Consider Switching Car Insurance
There are plenty of reasons why you would switch car insurances. A big move, a new job, or simply looking to save on your premium and lower your monthly payments. And while switching to a new one sounds right for you, you might want to look at some factors Moneygeek has compiled.
First, know where your car insurance stands in the market. Are you paying more than average? Searching online or contacting one of our partners are one of the best ways to make sure you are paying for a reasonable price and coverage. If you’ve examined your options and your current insurer still offers the best coverage, it makes sense to stay with your current provider. This potentially saves you from cancellation fees and most car insurance providers don’t provide a refund.
Apollo Insurance will make sure you are getting the best price and coverage out there. You won’t have to worry about anything!
#10: Be Thankful For What You Have, But Also Be Prepared For The Future
Lastly, appreciate what you have and had in 2022. It is always refreshing to start the new year with a positive and optimistic outlook. Each year brings us a lot of opportunities and challenges, which is why it is better to be prepared for everything we have control to. Affinity Trust wants to make your family’s future easier and provide them with the comfort they need, even when you’re gone.
Just to give a recap, here are our 10 Financial New Year’s Resolutions you should consider:
- Take Advantage of Higher Deposit Rates
- Keep Track of Your Expenses
- Check Your Credit Health
- Plan Your Retirement Early
- Take Advantage of Coupons, Rewards, and Discounts
- Be On The Lookout For Promotional Loans
- Plan Any Big Ticket Spend in Advance
- Try Practicing the 50/30/20 Rule
- Consider Switching Car Insurance
- Be Thankful For What You Have, But Also Be Prepared For The Future
Always remember the first step is always the hardest! We hope our Financial New Year’s Resolutions help you achieve your financial goals this 2023. We are always here for you when you need any help along the way!