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Improve Your Fiscal Fitness

Improve Your Fiscal Fitness

Woman stretching

During the summer months many commit to improving their physical fitness, but this is also a great time to focus on your financial health! To help get you started here are a few things that you should do to improve your fiscal fitness!

Financial Baseline

Give Yourself a Financial Check-up

Where are you right now? Review your current financial health so you can spot problem areas and work on improving them, as necessary.    

  • Update your budget, or get started if you don't currently have one
  • Review your credit report 
    • Look for reporting errors, mistakes, or possible signs of identity theft
    • While credit apps can be useful, they may not always provide the full picture.
      • AnnualCreditReport.com, is the only FTC (Federal Trade Commission) approved resource for your truly free credit report 
  • Assess your current net worth
    • A net worth statement is a snapshot of your current assets and liabilities 
    • Ideally, over time your financial health will improve, and assets will grow while liabilities shrink
    • Consider meeting with a financial professional to help you develop a plan to meet your goals
Budget Icon

Develop Your Core - Budgeting

A budget is an integral part of your financial health. It shows whether or not you can meet your monthly payment obligations, helps you spot spending leaks, and provides a way for you to map out your savings goals. And budgeting today has never been easier, with online tools, apps, and excel worksheets there is a tool for you! Not sure where to start? Check out some of the tips below. 

  • List your monthly income and expenses
    • List "fixed" expenses that remain the same each month (like rent or a car payment) and "flexible" expenses that vary (like groceries)
    • If necessary, review your expenses and look for spending leaks and things you can eliminate or reduce in order to free up funds. Use the "found" cash to pay down debt or build your savings quicker
    • Subtract your total monthly expenses from your total monthly income. If you expenses exceed your income you may need to cut expenses, improve income, or a combination of both. 
  • Think about your savings goals
    • A budget is a tool to help you meet your savings goals
    • Make sure you have a specific amount and time-frame to reach your goal. For example, you may want to save $1,200 to go on vacation in 12 months. 
    • Math time! Divide the amount you want to save by your timeframe to get a monthly amount that you should use to "Pay Yourself First". To save for our vacation we would divide $1,200/12 = $100 
    • Incorporate the $100 monthly payment as an expense 
    • Pro Tip: You should have 6 months of living expenses set aside in an emergency fund
  • Monitor your budget 
    • Check your progress each month and review your budget if your circumstances change
Debt Icon

Trim Down Debt 

There are several methods that can help you tackle your debt more effectively. Start with our "Know What You Owe" worksheet. List all of your current debts. Be sure to include the monthly interest rate, and your current minimum monthly payment on each. Then review some of these repayment strategies and choose the one that works best for you.

  • Avalanche Method - Prioritizes the most costly debt first
    • Sort debts from highest interest rate to lowest interest rate
    • Pay as much as possible towards the highest interest rate debt while paying the minimum on the rest
    • Once the highest interest rate debt is paid move down the list
  • Snowball Method - Eliminates smaller bills
    • Sort debts from lowest balance to highest balance
    • Pay as much as possible towards the lowest balance items while paying the minimum on the rest
  • Consolidation Method - Creates a set payoff schedule 
    • Consider consolidating multiple higher interest accounts into one personal loan with a set interest rate and term. 
    • Using this strategy may save you money and help you keep track of debt better
  • Balance Transfer Method - May help you save money 
    • With a balance transfer you can consolidate higher interest debt to a lower interest rate card
    • Read the fine print, and take into account any balance transfer fees that may apply before you transfer
    • Employ one of the strategies above to eliminate debt
    • See if a balance transfer is right for you
Piggy Bank

Bulk-up Your Savings

Once you have paid down your high interest debt, focus on building your savings. Use some of these savings strategies to get started. 

  • Start small
    • Start with any amount, but be consistent and develop the savings habit 
  • Automate your savings
    • Use auto transfer and split deposit to send money to your savings account on a regular basis
      • With online banking you can set-up a recurring transfer, so your savings will be automated and effortless
      • Some employers may offer you the option to deposit portions of your paycheck into different accounts, using a split deposit offers another easy way to save money regularly
  • Save raises, taxes, and bonus money
    • If you get an unexpected influx of cash, fight the urge to splurge and save it instead! 

Financial education content is intended for informational and educational purposes only and should not be construed as specific legal or tax advice.

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