As 2022 comes to a close, now is the perfect time to review all aspects of your personal finances and get your accounts in order. By doing so, you’ll not only gain a valuable picture of your financial health, but you’ll give yourself the opportunity to set or modify goals and discover more ways to save money. With this in mind, Chambers Bank is excited to share a list of 15 things you can do to prepare for a new financial year!
Are you ready to get started?
Review Your Assets and Liabilities
Before you can plan a budget and set financial goals, it’s important to do a complete overview of your assets and liabilities. That means making a list of everything you own and everything you owe. It’s a good way to organize accounts, show you where your money’s at, and help you envision where you want to see your money going in 2023.
To figure out your total assets and liabilities, you will need to build a personal balance sheet which, in the end, will show your overall net worth*. If you haven’t made a personal balance sheet before, you can find free templates online or search for a template on whichever spreadsheet tool you like to use.
*Net Worth=Total Assets-Total Liabilities
Build or Update Your Budget
Having a budget not only helps you see where your money is going, but it also helps you make better decisions about your income and spending. Everyone can benefit from budgeting, and it’s especially important if you:
- Don’t know where your money is going each month.
- Don’t save money.
- Want to get better control of your finances.
- Need to save for a major purchase.
- Find yourself struggling to pay debts.
To build a budget, you can download a free template from a spreadsheet tool or make one on paper; the nice thing about most templates is that they total your income and expenses for you. If you want to get more detailed, you can use Chambers Personal Finance or try a top-rated program like You Need a Budget (YNAB), Mint, or Personal Finance.
However you decide to budget, remember that you don’t have to be perfect! You just need to plan consistently and keep your budget up to date so you don’t end up overspending or borrowing more than necessary.
Identify and Set Financial Goals
Once you have an overview of your assets, liabilities, net worth, and budget, you can decide what you want to focus your financial resources on and write down some goals. Divide them into three categories including short-term, medium-term, and long-term. Here are some examples:
Short-term goals=Pay off credit card, save for new appliance, build vacation fund
Medium-term goals=Save for a car, pay off home equity loan, pay off college loan
Long-term goals=Pay off mortgage, save for retirement, save for child’s college fund
After determining your goals, decide how much money you want to put toward them each month and then start saving!
Build an Emergency Fund
As you’re probably already aware—unplanned expenses like car fixes, medical bills, and home repairs happen. So do job losses, business losses, and illnesses or injuries that can put you out of work. Fortunately, you can battle these budget-busters by setting money aside. At a minimum, try to have three to six months of living expenses put away in an interest-bearing savings account.
While it may take some time to build up a reserve, you can start small (even just $10 per week) and add more money each month as you’re able. The key is saving money right when you get paid versus taking a wait-and-see-what’s-left-over approach.
To help make savings easier, open a Chambers Savings Account and earmark it as your emergency fund. Then, set up a recurring automatic transfer or direct deposit to your savings account each time you get paid, so you’re not tempted to use the money.
Plan to Pay Down Debt
Paying down debt not only helps raise your credit score, but it also frees up money so you can make faster progress on other financial goals. Here are a few strategies you can use to help zero out those balances faster:
- Pay more than the minimum amount each month.
- Consider using the snowball method.
- Consolidate your debts into a single, fixed rate Chambers personal loan.
Review Your Insurances
It’s a good idea to review your insurance coverage at least once per year to be sure your assets and your health are protected and that you’re getting the best deals for the premiums you pay. This means looking through all insurance policies you own such as home, rental, auto, business, life, disability, long-term care, health, and dental. Check each policy’s deductible, coverage amounts, and exclusions so you’re aware of potential benefits and out-of-pocket expenses if you must use any of them.
Enroll In the Chambers Savings Cents Program
When it comes to money, little things add up over time, and that’s why enrolling in Savings Cents makes a lot of cents! It works like this: Each time you use your Chambers Debit Card online or in stores, Chambers Bank will round up your purchases to the nearest dollar and deposit the difference automatically into your Chambers Savings Account on the next business day.
To enroll, you just need to have a Chambers Debit Card and Savings Account and then complete an Automatic Transfer Form to authorize round-up transfers. You can complete the form at any branch location or contact us by phone and ask us to send you the form.
Reset Passwords on All Financial Accounts
Did you know that a large percentage of cybercrimes happen because of stolen or weak passwords? That said, protecting your financial data and identity starts with setting strong account passwords and changing them periodically. If you haven’t done so recently, pull up your financial accounts individually and set unique, new passwords for each one. Use at least 12 characters and add capital letters, numbers, and symbols to make your credentials strong.
For additional protection, you can secure any Chambers accounts linked to your Chambers Debit Card by using the SecurLOCK Equip app. With it, you can set spending limits, monitor your transactions, lock your debit card, and more. You can also use the Chambers Personal Finance tool to put your accounts in one place and protect them with a Chambers-hosted ID and password combination that you create.
Automate Your Savings
If you’ve got some new savings goals ready for 2023, one of the best ways to make sure you follow through is by automating the savings process. You can do this in several ways:
- Use Chambers Online Banking to transfer between any of your Chambers Checking, Savings, or Money Market Accounts.
- Set up a recurring transfer between an external financial account and any of your Chambers Checking, Savings, or Money Market Accounts.
Use Up Your Flex Spending Account (FSA) Money
If you have an employer-sponsored FSA account for health expenses, dependent care expenses, or both, you might want to think about using these funds up before you lose them at the end of the calendar year (unless your employer offers a grace period). Be sure to check your account balance(s) and then use the funds on qualified expenses to maximize on these tax-deductible funds.
Do a Tax Check-Up
Sometimes, the moves you make at the end of the year can have a big impact on how much federal and state tax you owe at tax time. Look at your income and deductions to see if you can benefit from making any tax-deductible contributions before the end of the year. You can also use online tax calculators to get an idea of whether you’ll be getting a refund (think savings!) or if you’ll have to pay in.
If you own a business and pay estimated taxes, don’t forget to review what you’ve paid in versus your income to avoid any underpayment penalties.
Make Sure You’re on Track for Retirement
Setting money aside for retirement is an important part of a long-term savings strategy, and the earlier you start contributing to a retirement plan, the more you’ll benefit from compound interest. How are you doing with your retirement savings goals?
Many of us contribute to work retirement plans such as 401(k)s, but you can also put money into an Individual Retirement Account (IRA) for added tax benefits and higher savings. Chambers Bank offers both Traditional and Roth IRAs for its members. Stop by one of our branch locations to learn more about setting up an account.
Sign Up for a Chambers Bank Credit Card
With recent rises in interest rates, some credit cards are charging close to 30% on all balances. If you’re looking for a card with no annual fees, low introductory rates, rewards points, and more, check out our Chambers Credit Cards and apply right online!
Check Renewal Dates on Plans and Subscriptions
Not sure what that automatic charge is on your account statement? Yeah, we’ve all been there. It’s easy to sign up for services with a bank account or debit card, forget renewal dates, and not even account for the expense in your budget.
To make sure you start your new year off surprise-free, review all plans and subscriptions, mark renewal dates on your calendar, and make sure to add the expenses into your budget. If you need some help locating what you’ve signed up for, this article provides links to some services that can help you.
Consider Increasing Your Income With a Side Hustle
Most of us could use a little extra cash, especially after the holiday season. And with many companies consistently needing part-time help, it’s possible for you to find fun and flexible work that helps you pay off debts or save toward your goals too! Check job websites like Indeed and LinkedIn to find openings in your area.
After reading through all the ways you can prepare your finances for the new year, set aside some time to complete whichever ones are applicable to you. If you need some additional assistance with your finances, please feel free to schedule an appointment with a representative at any one of our Chambers branch locations.
With a little preparation and know-how, you’ll be on your way to a solid financial year in no time!