Financial Matters: Key Questions

PORTSMOUTH, Va. (WAVY) - With January almost over, you may be working really hard to stick with those financial resolutions you set a month ago, like saving money and spending smarter, but it's never too late to get on the right financial track.

Sylvia Watford, a Financial Counselor and Educator with BayPort Credit Union has several tips to get you into financial shape this year.

I. Intro - With the beginning of a New Year and almost the end of the first month we realize that the time has come to fulfill those New Year’s Resolutions; especially in the area of our finances. Those credit card statements have start coming in and that vow to save my seem impossible. To ensure that we stay on a positive footing to improve our finances we need to ask ourselves some key questions this month to lay the foundation for the remaining of the year.

II. Key Points to consider (questions to ask):
a. How motivated am I to really change in a certain are of my finances? There is a quote that states “Nothing changes in our finances until we do. ” We can ask ourselves “On a scale of 1 to 10 how important is it for me to build an emergency fund, improve my credit, save for retirement?” The key is to be honest with yourself and ask “why is this important to me?” I recall a young lady stating that she wanted to build an emergency fund so that she could have the peace of mind knowing the money would be available so she would not continue to live paycheck to paycheck and avoid going into more debt.
b. Have I set “SMART” financial goals for myself? So many times we may say “I want to get out of debt, start saving for my kid’s college education or get a better paying job. ” That becomes wishful thinking if we don’t set the goals for it to become a reality.
i. “S” – specific: make your goal specific instead of keeping it vague – Instead of saying you want to save money state “I plan to save $200.00/month for the next 12 months to build an emergency fund. ”
ii. “M” measurable: ensure that you can measure it ($200.00/month).
iii. “A” – adjustable: be flexible for changes you may experience so that you can make adjustments. You may be out due to illness for a short time period and not be able to save $200.00/month. It is okay to reduce that amount or increase it if you get a bonus at work.
iv. “R” – realistic: figure out what will work for your situation. Although the rule of thumb is that we save 10% of our income it may be more realistic for you to save 5% even 1%.
v. “T” – time: setting a time frame allows you to reflect to determine if you have reached your goal. Reviewing the last twelve months will let you know if you have made it a reality. Make sure that you write down your goals. Putting them on paper helps to cement them in your mind and increases the chance of reaching them.
c. Who will hold me accountable? Share your goals with family and friends and ask for their support. Give them permission to ask how you are progressing towards building that emergency fund or finding a higher paying job.
d. How will I reward myself and share my success? By celebrating your success you feel a sense of accomplishment and it encourages you to continue that behavior. We are motivated by reward so plan it ahead of time.

III. Conclusion – By asking these key questions and then customizing a plan that will work for you, those financial goals can become a reality.

To learn more about Financial Counseling and Education, stop by any of the 14 BayPort Credit Union locations across Hampton Roads or click here to visit BayPort's website.