When January 1st comes around each year, most people try to think of at least one thing they want to improve in the coming year. For many, the resolution is about their health, whether it’s to lose weight, eat healthier, exercise more, or maybe even quit smoking. Experts say that one of the best ways to achieve your New Year’s goals is to start small. Breaking your goals into manageable milestones helps to build the desired habit and eventually that habit becomes a way of life. These milestones also act as small achievements, helping you stay motivated.

When deciding on your New Year’s resolution(s) for 2018, have you given any thought to improving your financial health? January is a good time to start fresh with a new budget that fits with your goals, even if it’s just to put more into savings, pay down debt, or maybe even a little of both.

Determine Your Discretionary Spending
Discretionary spending is the amount of money you have left over after you’ve paid your bills for the month. To determine this amount, take a moment to make a two column list. One column should list and total the money you have coming in each month, such as paychecks, child support and tips. The second column should list what you pay out for your rent or mortgage, utilities, car loans, student loans, credit card payments or other expenses, and the additional costs of food, clothing and other necessities like gas for your car.

Subtract the total of what you are paying out each month from what is coming in: the difference is your discretionary spending.

Resolution 1: Increase Your Savings
Once you know how much you have in discretionary spending each month, you can decide how much of it to put aside for savings. Be sure to think about what you spend on activities such as going to the movies, out to dinner, gym dues, sports events and anything extra you participate in.

Start small with $5 or $10 a week if that’s all you can afford. Over 52 weeks, you can save between $260 and $520. You can even resolve to put the money you would spend on a cup of coffee or buying lunch each day into savings. It adds up quickly!

No matter the amount, just the commitment to put money away for a rainy day is improving your financial health!

Resolution 2: Decrease Debt
Shopping for the holidays can leave us all with a bit of extra debt when those credit card bills start coming in. It’s always a best practice to pay off your credit cards each month, but if you can’t, knowing what’s available for discretionary spending can help you put extra money towards those balances.

Did you know that a credit card with a $2,000 balance will take over ten years to pay off when only making the minimum payment each month?! Increase that minimum payment by an extra $25 or $30 and the card can be paid off in less than three years and it may save you hundreds of dollars in interest expenses too.

If you have a car loan, a student loan, or a mortgage, you can use some of your discretionary spending towards principal payments. Any reduction in the principal balance over your regular payment will pay the loan off faster and save you interest over the life of your loan.


Yvette Temple

AVP, Customer Solutions Manager