January Financial Fitness Challenge--Five Things To Do This Month

by Susan Tiffany, CCUFC

It's no surprise that January is a big month for making resolutions. And if you've been making resolutions for a while, you know how many of them fall by the wayside before February.

The problem with conventional resolutions is that you have to keep doing them until they become a habit—that's kind of the point. These suggested resolutions are different in two ways. They're in the 'set and forget' category, and they can make your life so much easier that you're likely to keep them:

• Set up direct deposit. Once you arrange to receive regular payments like your paycheck or Social Security and pension checks with direct deposit, you'll never have to worry about making timely deposits again. You'll know that your deposit is in your account exactly when you expect it to be.

  If you haven't already figured this out, I want to do for direct deposit what Johnny Appleseed did for apple trees. I sincerely believe it can be the core—did I really say that?—of your good personal finance habits.

• Set up automated transfers to savings to pay yourself first. The next smart step, after direct deposit, is to get funds into savings right away so they can begin earning dividends from the get-go.

• Automate your mortgage payment. Even with the typical grace period that most mortgage lenders allow, it's always a good move to take care of that big monthly payment. Again, you'll never have to worry about making the payment on time.

• Automate minimum credit card payment or payments. The penalty for late credit card payments is expensive. Set up automated payments to cover at least the minimum due on all your credit cards; you always can pay additional amounts so you retire those debts as soon as you can. Make payments a few days before the due dates to protect your credit score.

• Arrange to have any overdrafts automatically covered from your savings account. Even if an overdraft is rare in your household, it can happen to the best money managers. Make sure you can cover any inadvertent overdraft with a direct transfer from your savings account and there's another worry you'll never have again.

Build your list of good habits

If you've already managed these resolutions, think of one or two more that could help you get on and stay on the straight and narrow financially. For example, you might want to set up a low balance alert or a payment due alert from your credit union's online service suite. Anything that makes life easier, and your financial life more productive, is a good habit to make.

A wise teacher told me years ago that a bad habit is easy to make but hard to live with—and a good habit is hard to make but easy to live with. What I like about these resolutions is that they make it easy to set up good habits.

Financial Fitness Challenge

The people at your credit union bring you this Web site and other tools to help you make the most of your financial resources. The Financial Fitness Challenge continues to look at ways you can make better financial habits no matter what condition the economy is in.

Each month we randomly select five winners to receive $50 Visa gift cards; we choose each month's winners only from that month's entries, so enter often. Remember to register for the Financial Fitness Challenge.

ST
Susan Tiffany, CCUFC
askem@cuna.coop

Published January 3, 2011

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