Have you decided that you’re going to do better in your finances this year?
We sat down with Frederick Medley, manager of the Logan Circle Chase branch, to learn how to make 2022 your best financial year yet.
First and foremost, eliminate bad habits of the past.
“Look at what you did the previous year,” Medley said, “What are some of the bad habits or opportunities you had the previous year that you can eliminate this year?”
One such habit that many suffer from is emotional spending.
“We are in the moment, and we feel like, ‘Hey I want to go splurge and buy this,’ that’s emotional spending,” he said. “Or if you are going through different things at a point in your life and you want to compress some things and go spend, that is emotional spending.”
Medley said emotional spending or overspending can hurt all the good habits you’ve developed.
Try to prevent yourself from falling into a bad habit, in order to succeed in the good ones such as goal making.
Setting goals is one key to financial success.
But Medley cautions that it’s important to be realistic when setting goals.
For instance, setting a goal to buy a house in a month, is typically an unrealistic goal, but setting a goal to buy a house in a year is realistic.
Accountability is key
To make 2022 the year where your goals are met, it’s important to have accountability, Medley said, adding that goals should be written down. This way you can refer to them throughout the year to keep yourself on track.
He also added that it’s important to be true to your goals.
“If you set a goal to say I am going to save $200 this month and you realize I have only saved $50, you want to make sure next month you are going to put back the money you didn’t reach the goal for,” he said.
One way to achieve a savings goal is through Chase’s Autosave program.
The program automatically transfers money from a checking into a savings account. Transfers can be made daily or periodically.
The bank has even added an incentive of no monthly service fee for customers who save $25 each month.
Chase recommends customers set aside money in a few different savings accounts, according to its website.
Safety net: Your safety net is meant to cover you for a few months in case of unexpected life events. It’s a good idea to save at least 3-6 months of your expenses, but you can start off with what feels comfortable to you. You can set up a repeating transfer when you create your safety net, or you can set it up later.
Custom goal: A custom goal is anything you want to save for—from a dream vacation to a new car. You can personalize your goal by giving it a name and adding a tag. You don’t have to add money to this goal when you create it. You can choose to set up the goal, and then come back later to set up a repeating transfer. You can also add money to this goal by making one-time transfers.
General savings: General savings allows you to set up a repeating transfer to your savings account without creating a specific goal.
Medley also suggests monitoring accounts on a daily basis to review your spending habits, adding that small daily goals can go a long way.
“Small goals can bring confidence to reach larger ones,” he said.
Finally, one of the most important ongoing habits should be credit management, Medley said.
A good credit score is the key to everything, from renting an apartment, getting a loan to buying a house or a car. Medley wants to make sure people understand the “importance of credit, managing credit and the utilization of credit. It’s also important to understand how important credit can be for you not just now, but also in the long term. If you’re ever unsure for how to raise your credit score, stop into any branch and we’d be delighted to support you.
More information on budgeting and saving can be found at https://www.chase.com/digital/customer-service/helpful-tips/personal-banking/mobile/budget-planner.