As the New Year begins, the air is thick with resolutions. For many, these aspirations revolve around finances—saving more, investing wisely, or clearing debt. Your financial institution can assist you with more of these goals than you might expect. Let’s dive into the strategies, tools, and stories that illustrate how banks and credit unions are pivotal allies in helping individuals achieve their financial resolutions.
Achieving Different Resolutions: Guidance from Financial Institutions
Since resolutions come in all shapes and sizes, plans for achieving them have to be diverse as well.
Resolution: Increase Savings
Increasing savings involves defining clear savings objectives. Your financial institution can help you “set it and forget it” with automatic transfer options that funnel a percentage of income directly into savings accounts. Additionally, they can provide tailored financial advisory services to help you create and achieve realistic savings goals and foster a habit of regular saving.
Resolution: Decrease Debt
Your financial institution may provide debt consolidation loans, allowing you to combine multiple debts into a single loan with a potentially lower interest rate. This simplifies repayment and can reduce overall interest costs.
Many FIs offer credit counseling services or can refer customers to reputable credit counseling agencies. These agencies can guide budgeting, debt management, and negotiating with creditors. This can be particularly helpful for those facing financial hardship.
Resolution: Improve Credit Score
Your bank or credit union has information on how credit scores work and the factors influencing them, as well as credit-building tactics. Many also offer secured credit cards. These cards require a security deposit but provide an opportunity to build or rebuild credit with responsible card use.
Resolution: Protect Savings
Your financial institution may offer credit monitoring services that allow you to regularly check your credit reports for any errors or suspicious activity. They may also offer Cyber Insurance which protects financially against loss due to identity theft, malware damage, data recovery and more.
Another great way to protect your savings is through supplemental insurance. Your bank or credit union most likely offers products like Accidental Death and Dismemberment Insurance which pays cash benefits for loss of life, limb, sight, speech, or hearing due to a covered accident.
Supplemental insurance can also help protect your savings and help pay the out-of-pocket costs that are not fully covered by any other insurance you may have.
Resolution: Increase Investments
No matter which financial institution you frequent, we guarantee they have a ton of educational tools on investment fundamentals, financial advisors, and access to diverse investment portfolios tailored to different financial goals.
Real-Life Stories of Consumers Reaching Financial Resolutions
One real-life story is that of a woman named Krys who utilized a financial institution’s budgeting app to reach her financial goals. She was nearly $20,000 in debt at the end of 2019. The financial burden was becoming too much and starting to cause issues throughout her entire life. This is when she decided to start a budget.
Krys created eight financial resolutions for the year:
- Get off the credit card float.
- Start contributing to sinking funds for known expenses.
- Build a $1,000 emergency fund.
- Pay off credit card #1.
- Pay off credit card #2.
- Be a month ahead (live on last month’s income).
- Pay off the home equity line of credit they took to replace their window.
- Pay off the car loan.
After the first month of support from her financial institution, she saved $1,500 and crossed off the first three items on her list. By month two, she had paid off $3,000. Despite the challenges of 2020, she saved over $18,000 in cash, paid off over half her debt balance, and achieved seven of her eight initial resolutions!
The Role of Financial Institutions in Resolutions
Financial institutions play a crucial role in helping consumers achieve their financial resolutions. By offering personalized guidance, fostering ongoing support, and offering products for a variety of financial situations, they empower individuals to turn their financial aspirations into tangible realities. The benefit of having a strong relationship with one financial institution is their ability to see your complete financial picture and help you achieve both your current and future goals.