Staying on Track with Your Goals for the Year Ahead.

Getting started with your financial plan

The first step is understanding how you spend and save today.

• Start with what you have. Make a list of all the ways you currently save: savings accounts, certificates of deposit, money markets, investments. Next to each item, write the balance in that account.
• Then write down what you owe. Debt is a financial tool, but having too much of it is stressful. Add your debts to the list: car loans, student loans, home loans, outstanding bills, money borrowed from a friend. Next to each item, write the amount owed.
• Create a budget. A budget is simply a list of income and expenses, but it puts you in control of your finances. Make  your budget on paper, in a spreadsheet, or in an app—whatever is most likely to become a habit.
• Focus on paying off debt. Some people work from the smallest debt to the largest. Others start with the loan that charges the most interest and work their way down. Make this part more fun by challenging someone to a friendly competition to see who get can out of debt faster.
• Clean your financial house. Review your latest checking and credit card statements. Look for automatic payments for memberships and subscriptions you no longer use. Cancel them, then put the extra money toward debt.
• Set yourself up to win. Some expenses can sneak up on you, whether it’s something fun, like holiday giving, or something mandatory, like taxes. Make sure these are part of your budget, and put aside money for them a few months in advance so you won’t be caught by surprise.
• Don’t forget emergencies. Work toward saving enough money so an unexpected car repair or defunct refrigerator won’t ruin your week. Eventually, save enough to cover three to six months of expenses so you’ll be ready if a job loss or medical issue happens to someone in your household.

Setting savings goals

Next up, think about the large expenses you’re saving for and when you need to have the money to pay for them.

• Do the math. Use an online calculator to test different dates and dollar amounts until you find the right combination for your situation. Try our financial calculators.
  
• Make your savings goals part of your budget. Monthly payments toward your goals get you that much closer to them and keep you from overspending on items you don’t need.
  
• Make savings automatic. If your employer pays you through direct deposit, see if they can put a portion of each check into your savings account. Otherwise, set up a monthly transfer from checking to savings so you save without having to think about it.
  
• Choose the right savings account. A basic savings account has no minimum balance and low or no fees while a high-interest savings account earns more. Find the best savings account for you.
• Learn about CD ladders. A certificate of deposit offers higher rates than most savings accounts as long as you don’t touch it until maturity. With a CD ladder, you open multiple small CDs that mature at different times. That way, you can earn higher interest and have regular access to some of your funds.

Investing for the future

Finally, if your savings goal is five or more years away, consider putting your money into mutual funds or other long-term investment vehicles.

• Find the right financial partner. Choosing a company you already work with can be a smart strategy. First Commercial Bank financial consultants can answer your questions and help you find the right solutions for your situation.
  
• Understand investment fees and expenses. Investing typically comes with a cost, and fees can add up quickly. Ask your financial consultant how they are paid and where to find investment expenses on your quarterly statement.
• Monitor your investment performance. Your financial advisor is an invaluable resource, but you should keep a close eye on your investment portfolio, too. After all, no one knows your goals better than you do.

We can help.

Reaching your financial goals is possible. Your friends at First Commercial Bank are here to answer any questions you might have. Give us a call or stop by a local branch.