7 Ways to Improve Money Management | Florida Credit Union

A new year brings an opportunity for a fresh financial start. As we move into 2024, now is the perfect time to take control of your money management and set achievable financial goals. Whether you struggled with overspending last year or simply want to build better financial habits, implementing a few practical budgeting strategies can make a big impact.

Our team at Florida Credit Union has put together this list of money-saving tips to help you reduce expenses, pay off debts, nurture your wealth through investing, and grow your emergency fund. This advice can benefit just about anyone looking to become more financially fit this year, so let’s get started.

1) Review Your Budget and Expenses from 2023

Before making any budgeting or expense goals for 2024, take time to analyze where your money actually went over the past year. You may find some obvious places where you overspent without even realizing it on a day-to-day basis.

Start by taking a look back at old bank and credit card statements. What monthly costs stand out as being too high? Were you regularly eating out too much or overextending the entertainment budget? Look for those variable expenses that really add up over 12 months. You may see a prime opportunity to cut back expenses on dining, bars, memberships, ride shares, or streaming services.

Next, dig into your fixed costs. It’s worth calling up service providers like your cell phone company, cable company, or insurance agent to see if they have new promotions or can adjust your monthly fee. You may discover you are overpaying or have extra features you don’t really need. 

Once you’ve identified areas of overspending, it’s time to turn insights into action. Use your findings to build a realistic line-item budget for next year in a spreadsheet or budget planning app. Having clearly defined spending categories and caps will make it easier to track 2024 expenses month-to-month and hold yourself accountable.

2) Pay Down High-Interest Debts

Credit card debt, personal loans, and other debts with high interest rates can hold you back financially if you only make minimum payments each month. When it comes to prioritizing financial goals for 2024, focusing on paying off those double-digit APR debts more aggressively should be near the top of your list.

Start by listing out all outstanding debts you currently owe along with their interest rates and payment due dates. Rank them starting with the highest interest rate debt first. Shift your focus to putting as much money as possible monthly towards paying off the debt atop the list before moving down. 

For debts with exorbitant interest rates, balance transfer credit cards can provide some temporary relief as well. Consider transferring high APR balances over to a card offering 0% APR for 12-18 months. Just be sure to actually pay off the entire balance within the intro 0% timeframe.

You might also save money by consolidating or refinancing debts into lower rate products when possible. For example, you could refinance student loans or move high-interest credit card balances to a lower-rate personal loan. Just be sure to crunch the numbers in advance and avoid extending payoff timelines significantly.

3) Build Up Your Emergency Fund

Life has a way of throwing unexpected crises and costly surprises at us when we least expect it. A job loss, major car repair, leaky roof, or urgent medical bill can derail your finances overnight without proper precautions in place. That’s why building up an emergency cash fund needs to be a top priority.

Financial experts typically recommend keeping 3-6 months' worth of total living expenses set aside in your emergency fund at all times. To calculate the right savings target amount for yourself, add up all recurring monthly costs like rent/mortgage, debt payments, groceries, transportation, utilities, and healthcare. Multiply the total by 3-6 depending on job security, health risks, and other factors.

Once you establish an emergency savings goal amount, start directing a portion of each paycheck automatically into a designated high yield savings account separate from everyday funds. Just be sure emergency money remains easily accessible and out of risky assets that could lose value. Don’t tap into these vital reserves for non-urgent needs. 

4) Increase Your Retirement Savings Contributions

It’s easy to put retirement savings on the back burner, especially when you are young and it seems so far off. However, thanks to the power of compound interest, money you save in your 20s and 30s can grow exponentially for years. That’s why making retirement contributions a priority starting this year is a smart financial move.

Ideally, you should aim to save at least 15% of your income annually towards retirement in accounts like a 401(k) or IRAs. If you aren’t quite there yet, start by increasing automated transfers into retirement accounts by even just 1-2% more from each paycheck. Then schedule contributions to grow by an additional percent or two each year.

You also want to find out if your company offers any match programs for 401(k) or 403(b) contributions. This essentially gives you free money, sometimes matching 50 cents or more per dollar saved up to set maximums. At minimum, contribute enough to max out the full match.

5) Save Up Cash to Pay for Big Purchases

When it comes to making big purchases, it’s tempting to simply whip out the credit card and worry about payments later. In 2024, commit instead to saving up cash ahead of major buys.

Start by listing upcoming anticipated expenses exceeding $1,000 like a kitchen remodel, bedroom furniture set, or tropical getaway. Open individual savings accounts dedicated specifically to each savings goal. This helps visually track progress towards each target amount separately in self-named accounts.

Then set up automatic recurring transfers from each paycheck allocated across the different saving buckets based on priority and timeline. Use percentage-based auto-transfers guaranteeing funds consistently flow into goals over time regardless of income fluctuations.

Watch balances grow incrementally each month. Resist the urge to tap into funds for other temptations along the journey. Within 12 months or less, exciting purchases can become 100% self-funded without money owed. You might even score discounts paying fully upfront with cash or debit as well versus financing.

6) Shop Around to Save 

Too many people overpay for recurring big-ticket items like insurance plans and loans simply because comparing rates and renegotiating terms takes time and effort. But being an informed shopper who leverages competition among vendors offering similar products ultimately pays dividends through lower monthly bills.

Start by making a list of those autopay expenses you've been passively paying over many years without much thought, like home/auto insurance, mortgage payments, internet plans, or gym memberships. For each item, devote some time every six months to gathering updated price quotes from rival providers. You can easily access quotes online or via phone during off-peak customer service hours for convenience.

Crunch the numbers comparing competing rates and policy details objectively. Be willing to switch if the numbers make financial sense over the long run. Initial promotional rates that discount early months to win your business don’t outweigh long-term stability and savings.

7) Automate Finances to Improve Consistency

Budgeting only works if you stick to the plan consistently month after month. Too often, good financial intentions get derailed by poor discipline, constantly changing priorities that leave goals by the wayside, or struggling to manage different accounts spread across various institutions and platforms. That's why automating as much of your finances as possible sets the stage for long-term stability.

Start by taking advantage of automatic bill pay features offered by most utilities providers, lenders, cell phone companies, and insurance firms nowadays. Setting up scheduled automatic transfers ensures you never miss debt payments or overdraw checking accounts covering recurring costs. Building financial discipline into busy schedules eliminates the risk of forgetting due dates or having checks bounce.

Ready to Get Started?

Implementing even just a handful of these practical money management tips can make a big difference improving your financial fitness in 2024. Whether you aim to budget smarter, get out of debt faster, maximize retirement savings, oversee investments more closely, grow emergency reserves, spend less on big expenses, or introduce more automation into managing money - consistent progress pays off over time.

Stick to the financial priorities and action plans laid out here as much as possible throughout the year. Check back on your goals quarterly. Course correct spending or savings rates if certain areas start veering off track. With disciplined tracking of your finances and proactive changes when necessary, you can build stability today to reap financial gains well into the future.

Florida Credit Union encourages members to leverage these tips tailored to different goals and situations. Here’s to making 2024 your most financially successful year yet on the path towards long-term wealth and security.