SEATTLE - One of the most common New Year's resolutions is becoming more physically fit. Financial experts say folks also should consider becoming financially fit in 2020.
Lynn Heider, vice president for public relations with the Northwest Credit Union Association - which represents more than 170 credit unions in the region - says the first key to better finances is saving. She notes that experts recommend saving enough money to cover living expenses for three to six months as a cushion in case of an emergency, such as job loss or prolonged illness.
"I know that sounds daunting, but you have to start, and once you start, it starts to build up pretty quickly," says Heider. "So some ways to do that are to sit down and determine how much money you're spending every month and how much of that you really need."
Heider suggests ditching unnecessary purchases and considering ways to save on other expenses such as utility and phone bills.
For instance, when choosing the gym membership key to your physical-fitness goals, consider what parts of the gym you actually use. Large gyms with pools and racquetball courts may be enticing, but unnecessary if you usually stick to the treadmill and weight room.
Heider says people should become fans of automation, setting up auto-pay for rent and bills to avoid late fees and for peace of mind.
She says people should write down budgets and evaluate them with the 50-20-30 rule. The rule says 50% of your income should go to essentials, such as rent and utilities; 20% toward personal financial goals, such as savings and paying off debt; and 30% toward flexible expenses, such as entertainment and eating out.
"This will be a way for you to pay off debt, to save money and to sort of go on a financial diet as the new year starts," says Heider.
Heider adds the caveat that the Northwest's high cost of housing means more money could go toward that expense. She encourages people to look into their local, not-for-profit credit union.