All week long, we’ve been giving you tips to help you out with your New Year’s resolutions. Today, we are talking about budgeting! Mark Munemitsu, President and CEO of Honolulu Federal Credit Union or HOCU, joined us today with some money saving tips.
Mark shared these 6 tips:
1. Take an Honest Look at Your Finances
And be honest with yourself. Review your financial purchases from the past few months and see where you’re spending frivolously. And this should in all aspects of your life, including those impulse online purchases and random streaming subscriptions. You might be very surprised where the money is adding up each month – like morning coffee purchases or grabbing lunches during work.
And if there’s any area in your financial life that you feel needs improvement, make sure to cut back slowly. There’s no need to cut it out entirely, like a strict diet. Just like any lifestyle change or workout regimen, it’s good to take baby steps and build on limiting your spending habits over time.
2. Automate Any Recurring Payments
If you know of any recurring payments such as loan or credit card payments, you should automate them to meet your financial goals and not stray away from your set monthly budget. One of the best tools is payroll deduction which sets a predetermined amount out of your paycheck and have it automatically deposited into your savings account.
Also, most financial institutions including HOCU have Mobile or Online Bill Pay that can be used for paying bills on time by automatically taking money out of your checking or savings account. This helps you stay on budget and help improve your credit in case you need a loan in the near future.
3. Create An Emergency Fund
If there’s one thing these last few years have taught us, is that life can always be unpredictable. Even the best of budgets can be thrown off by an unexpected event, so it’s important to have an emergency fund. Ideally, you want to build up your emergency fund to be at least 3-6 month’s worth of bills. This will help if you ever encounter any unexpected obstacles.
It’s also good to set aside additional funds for expenses that might come a few times a year such as dental visits, vacations, etc.
4. Pay Off Credit Card Debt As Soon As Possible
Charging purchases to your credit cards can be so easy during the holiday season, but of course leads to putting a huge dent in your budget. It can be difficult to dig yourself out of that hole of debt, so please pay off your credit card debt as quickly as possible that your budget allows.
Also, please pay your more than the minimum balance for monthly credit card payments. It can barely make a dent by the interest charged to your credit card account.
If you’re deep down in the hole of credit card debt and have multiple balances to pay off, talk to your financial institution about credit card consolidation. This can combine multiple credit card balances into one with usually a lower interest rate, making it easier to pay off.
5. Don’t Act on Impulse for Large Purchases
We’ve all had that moment – you’re in a store and immediately want to buy a big-ticket item such as a brand new TV, phone, etc. With credit cards and other options, it’s easier than ever to purchase large items, but that can throw off your savings and budget.
For purchasing large items, wait at least a day until you make the decision and ask yourself the following questions.
– “Do I actually need this item right now?”
– “Can I afford to pay cash for this item?”
For most large items, taking time to wait helps you realize what you do and don’t need.
6. Use Credit Unions as a Resource
Credit Unions are a fantastic resource for all your financial and budgeting questions, including creating the best budget for you and your family. Most credit unions including HOCU offer one-on-one in-branch consultations and even educational courses that focus on savings and budgeting. To get in touch with the Honolulu Federal Credit Union call (808) 777-5646 or visit myhocu.com
