By Marcus Hill | CSMNG Staff Writer
The holidays are over and it’s that time of the season where people begin to tally up their bills.
While everyone is cleaning up messes made during the holidays, many are preparing resolutions for 2020 — and getting finances in order is a common one. That may mean building up a savings account, repairing credit issues, eliminating debt and more.
It’s a task many people seek to accomplish but often struggle with. Part of the problem is many people don’t empower themselves with the proper tools to do the job.
“Step 1 is to write down your goals and put them where you will see them,” said John Willcockson, a Colorado Springs area financial counselor. “There is something about writing goals down on paper that boosts your motivation.
“Take a moment to figure out which goals are most important, and put them in order.”
Willcockson suggests those with financial goals get SMART.
No, he’s not questioning anyone’s intelligence. It’s an acronym used to help stay on course financially.
“In financial counseling we like to use SMART goals,” he said:
Specific: direct, meaningful, detailed;
Measurable: quantifiable, able to track;
Attainable: realistic for your abilities and resources;
Relevant: aligns with your values; and
Time-based: milestones and a deadline.
Wealth isn’t created overnight and patience is key, Willcockson said, so it’s important to start with small, manageable goals in order to hit bigger achievements.
One suggestion, outside of opening a savings account, is to create a spreadsheet to track spending habits.
“Making a planner or spreadsheet helps you to see where you can tuck away and save more of your money,” said Heather Wynkoop, member service representative at Ent Credit Union. “As long as you utilize it, it can be a useful tool. If you have that strength to keep from spending or buying random items, you can see where else you can save.”
Rather than splurge on small wants, Wynkoop said that money could go toward a vacation or savings.
Or, even better: It can be reinvested.
One way to build wealth and save money is with a savings account, preferably a high-interest yield account.
But what about those going through financial hardships?
Those living paycheck to paycheck may have a difficult time building the wealth needed to begin saving.
Cailin Joe, member service representative at Ent Credit Union, says savers have to begin somewhere.
“You’ll never make a difference if you don’t make that first step,” Joe said.
Willcockson said this is where the SMART plan comes in handy. Putting the SMART acronym into practice not only requires discipline, he said it also helps to create a vision.
“We might think, ‘I want to buy a car’ and that’s an OK start,” Willcockson said. “To be successful, you will do better with more detail. If you want to buy a three-year-old Corolla with no more than 40,000 miles, at a price no higher than the [Kelly Blue Book] average, that gives you enough detail to make progress. Some research may be required.”
Specificity helps people develop a keener sense of what they’d like versus what they need and helps to hone in on what must be done to reach those goals.
“You might find that working with someone else can help keep you on track,” Willcockson said. “Ask a friend to keep you on track and honest. If your goal is to save $100 per month toward a down payment on your Corolla, ask a friend to check your progress at the end of each month. You may have to share each monthly bank statement with your friend.
“If your savings balance has not gone up by $100 at the end of each month, you owe your friend an agreed upon reward; maybe a Starbucks coffee or a chocolate sundae. If you do hit your monthly goal, your friend buys their own coffee, and you both enjoy a visit.”
Debt is also a hitch that burdens people from reaching their financial goals. Willcockson said that’s a subject that can fill an entire paper. But he kept his suggestion short.
“Find a debt or financial counselor — free, if possible — and check with your bank or credit union,” Willcockson said. “Avoid debt-repair companies. Their ‘cure’ is typically worse than the disease. Figure out how much you owe and write down the name, the balance, the interest rate, monthly payment and any deadlines on that debt. Make a budget and figure out how much debt you can pay down on each monthly budget.”