During the New Year, many people find themselves in a period of reflection, contemplating ways to improve their lives in the year ahead. Between health and fitness and career goals, one area that oftentimes gets overlooked is personal finance. Whether you aim to build an emergency fund, pay off credit card debt, or invest for the future, setting financial resolutions can help you take control of your economic well-being. Our team at Legacy Bank helps customers across the state meet their financial goals, with physical locations in Wichita, Colwich, Pratt, and Sedgwick, Kansas, and is exploring some achievable financial resolutions for 2024!

Prepare for Unexpected Expenses

Don’t get caught without a backup plan! Should an unexpected expense arise, like emergency medical bills or an unaccounted-for set of new tires, it’s in your best interest to have an emergency savings account. Our experts at Legacy Bank recommend you aim to save three to six months’ worth of living expenses in an easily accessible account. This will serve as a financial safety net that can help provide peace of mind in case of medical emergencies or even job loss.

Resolution: In the New Year, make it your top priority to contribute to your emergency savings account until you achieve a minimum of three months of living expenses!

Deal With Debt

Do you have credit card debt, student loan payments, or outstanding balances? 2024 is all about addressing and managing your debt! To manage your debt effectively, create a comprehensive list outlining your total amount owed, interest rates, and minimum monthly payments. Once you have a clear picture, consider the following strategies to prevent becoming overwhelmed:
Snowball Method: Tackle smaller debts first to build momentum. As each debt is paid off, you can apply the freed-up funds to the next one in line.
Avalanche Method: Prioritize debts with high interest rates. This method minimizes the overall interest paid over time, helping you become debt-free faster.
Consolidation: Explore options like debt consolidation loans or balance transfers to streamline multiple debts into one, potentially with a lower interest rate.

Resolution: Use one of the methods above to pay off smaller debts and save on added interest!

Save for Retirement

No matter your age, it’s never too early or too late to start saving for retirement. If you have access to an employer-sponsored retirement plan like a 401(k), maximize your contributions and take advantage of employer matches if available. You should also explore traditional or Roth IRAs to supplement your employer-sponsored retirement savings plans. And the best part? You can set up automatic contributions to your retirement accounts, making the process easy and user-friendly. Remember, consistent contributions, even small ones, can accumulate significantly over time!

Resolution: Contribute the maximum amount your employer will match into your employer-sponsored retirement plan. If you don’t, you’re leaving money on the table!

Improve Your Credit Score

One of the biggest mistakes young people make when first learning about personal finance is neglecting their credit score. But, maintaining a good credit score is essentail for receiving favorable interest rates on loans and credit cards. While improving your credit score is a gradual process, there are a few steps you can take to set yourself on the right path! Our team recommends obtaining a free credit report (from Equifax, Experian, or TransUnion) and reviewing it for errors or discrepancies. After you’ve reviewed your credit score, practice the following:

Make Timely Payments: Pay all bills, including credit cards, on time, as payment history is a significant factor in determining your credit score.

Reduce Credit Card Balances: Aim to keep credit card balances below 30 percent of your total credit limit. High credit utilization can negatively impact your score.

Diversify Credit Types: Maintaining a mix of credit types, such as credit cards, installment loans, and mortgages, can positively influence your credit score.

Resolution: Pay all bills and credit cards on time while aiming to use only 30 percent of your total credit limit!