It’s no secret that 2020 was a difficult year. Even the best-laid plans came undone in the wake of the global coronavirus pandemic that has dominated our lives for the past nine months or more. But with vaccines beginning to be administered in the U.S. and worldwide, 2021 may be looking brighter for many of us. While this past year has taught us there’s much we can’t control, one area you can take positive action in 2021 is by making some financial resolutions.
Popular New Year’s resolutions often center on self-improvement, whether it’s exercising more or committing more time to a new hobby. But financial resolutions can help chart the course for feeling financially strong throughout the year. Remember to be specific about any financial goals -- you’re more likely to achieve them if they’re well-defined and actionable.
Looking for some inspiration? Here are 5 financial resolutions for 2021.
1. Start an Emergency Fund
If you didn’t already have an emergency fund, this year may have unfortunately shown why they are so important. At Academy Bank, we like to call them “peace of mind” accounts because of the peace of mind they can provide. A study by Bankrate reported that only 28% of Americans currently have emergency funds. And many people would have a hard time coming up with $400 for an emergency, according to the Federal Reserve.
In a year of turmoil that included financial shifts for many families -- from medical bills, to working from home, to job loss -- an emergency fund could help soften the blow. And 2020 officially proved that anything can happen. Things far beyond our control. If you don’t already have an emergency fund, set a smart financial goal to establish one in 2021.
Even if you have to start small with the amount in your emergency fund, don’t let that deter you from starting it in the first place. An emergency fund with a small amount of money can still be helpful, and it’s certainly better than having no emergency savings at all.
2. Learn to Use Digital Banking
With each year comes more technological advances -- many of which can fit into our lives seamlessly to make things easier for us. If you already have a checking account with digital banking, you may not know that you already have access to your personal finances right at your fingertips. It’s on your mobile phone, tablet or your computer through digital banking. Digital banking is free and easy once you learn your way around.
This year, save a few trees and trips to the bank by going paperless. Here are some of the benefits of digital banking from Academy Bank:
- Streamlined Access - More intuitive experience that works similarly across all devices -- mobile, tablet or desktop.
- Enhanced Alerts - Set up, customize and manage alerts the way you want with ease.*
- Mobile Deposit - Deposit checks for free in a snap – safely and securely from a mobile device.** Available on iPhone or Android.
- New Payment Tools - Move money to your other accounts through account-to-account transfers. Use bill pay to schedule and send payments. Plus, we’ve partnered with Zelle® so you can easily send and receive money from friends, family and others you trust.*** Learn more about Zelle.
- Secure Messaging - Reach us for questions about your account on any device through secure messaging.*
3. Automate Your Savings
While we’re on the subject of Digital Banking… have you considered setting up automatic savings? Saving money during a pandemic can be hard, especially when it seems like unexpected expenses are popping up left and right. Who has the energy or money to think about saving during a time like this?
Turns out that Academy Bank can make it easy with our Saving Cents program. Through Saving Cents, your purchases will be automatically rounded up to the nearest amount of your choosing. The extra dollars or cents saved are added to your savings. So you’re saving money without even thinking about it.
Here’s how it works:
- Choose - Choose how much you'd like to round up your debit card purchases from your checking account. Options range from the nearest $1 to $5 increment.
- Save - Every time you make a purchase, we’ll round it up. Each night all the extra change is transferred automatically from your checking account to your savings account.
- Track - We keep track of Saving Cents transfers and place that information right on your bank statement each month.
4. Create a New Budget
More Americans are budgeting than ever before, according to a Debt.com annual survey. But in such a turbulent, abnormal year, it shouldn’t be surprising to think that your “normal” budget may need an overhaul.
Your financial situation likely looks much different than it did at this time last year. Whether you endured employment changes or had another big life change as a result of the pandemic. But even those who remained employed the full year may have experienced financial changes as a result of working from home.
By ensuring that your budget matches your current situation, you can set yourself up for a better chance of success when it comes to sticking to it. Otherwise, that budget isn’t good for much.
5. Work to Manage Debts
Many Americans have debt, and a difficult year likely didn’t make it easier to manage. But continuing to stay on top of it by managing it the best you can is a smart goal for 2021. Unmanaged credit card debt, student loans and more often only lead to more financial stress and interest rates. And it can sometimes feel like it’s snowballing out of control.
But you can also throw that snowball back at your debt: the snowball method is one debt repayment strategy, according to Investopedia. With the snowball method, you pay off your smallest debts first to help build your motivation through the debt payment process. The other winter-themed debt metaphor is the avalanche method -- which is when you pay your debt with the highest interest rate first.
To Your Financial Health
Although 2020 was a difficult year, creating financial resolutions may help you feel more in control of your financial life in 2021. And Academy Bank will be here as your partner through it all. A happy and healthy New Year to you!
* Message and data rates charged by your mobile phone carrier may apply.
** Deposits are subject to verification and not available for immediate withdrawal.
*** Zelle and the Zelle related marks are wholly owned by Early Warning Services, LLC and are used herein under license