An integral part of successful financial planning is reviewing your financial health a few times a year. Doing so can help you evaluate progress on your goals as well as make changes if necessary. If you haven’t made a financial plan or set goals for yourself this year, it’s not too late to start!
Areas to Examine
Your credit score is one of the main factors that determines your ability to take out loans, and it also influences the terms of said loan. If one of your year’s goals is to improve your credit score, how is it going? If you’re not sure what your score is, Florida Credit Union offers members signed up with online banking access to their FICO® credit score every month.
If your score is not improving or has gone down, you should look at your financial habits to see if they may have had an impact on your score. Every FICO® credit score comes with two score factors that are influencing your score, giving you a good place to start for changes you can make for the rest of the year and beyond that will result in a better score.
Evaluate your budget! Look at your expenses and use the data from the last few months to determine if you’ve budgeted too much or too little for each category. For example, if you’ve been spending less than you initially allocated for groceries, you can reduce the monthly grocery budget and divert the savings to another category like leisure expenses or savings. If you have debts, it’s also important to establish a debt payment strategy and prioritize which debts to pay off first.
If you don’t currently have a budget, starting one is very easy! We’ve written about popular budgeting strategies before, and there’s bound to be one that catches your eye.
Much like life, financial plans aren’t meant to be static for long. Have you gotten married, taken a mortgage or recently received a pay raise/reduction? These life changes are bound to have an impact in your finances in one way or another, both positively and negatively.
A marriage could mean two incomes to handle bills, while a mortgage means a new, monthly bill. If you’ve received a nice bump in pay while keeping your expenses at the same level, you have to make choices as to where the extra money is going. There are plenty of options, like putting the money towards an emergency fun or upping your 401(k) or retirement account contributions per month. You could also plan to take a nice vacation that previously wouldn’t have been possible.
If you’re expecting a big life change soon, you can also try to plan early and adjust your spending or budgeting habits to reflect this change. Regardless what the choice ends up being, be sure to plan for it and make changes to your financial plan accordingly.
If you’ve taken a dip into your emergency fund for things like unexpected car repairs or medical bills in the last six months, it’s imperative you replace those funds as quickly as possible! Better to have and not need than to need and not have! We’ve typically suggested that folks keep up to three months’ worth of monthly income to deal with unforeseen expenses, though higher figures are not uncommon. Pick the amount that you think would be the most beneficial.
One of the last pieces of advice we can offer is to update your plan frequently! Reviewing your plan monthly or every couple months to verify its effectiveness will ensure you’re able to achieve the financial goals you’ve set for yourself! Any attempts you make to take charge of your financial health and achieve financial independence is good, so get started today!
Florida Credit Union is a full-service financial institution. Founded in 1954 as the Alachua County Teachers’ Credit Union, FCU now services over 120,000 members in 48 counties throughout North and Central Florida. For more information on the services we provide, visit FLCU.org or call us at 1-800-284-1144.