By Craig Boivin - UMassFive College Federal Credit Union

(Published in Northampton Living January 2025)

As the new year begins, it’s a perfect opportunity to reassess your financial goals and put yourself on a path to success. By taking proactive steps now, you can create a solid foundation for a more secure financial future. Here are four practical tips to help you start the year strong:

CREATE OR REASSESS YOUR MONTHLY BUDGET

A budget is the cornerstone of financial health. If you don’t already have one, now is the time to create it. Start by listing your income sources and tracking all expenses, including fixed costs (mortgage/rent, certain utilities and loans) and variable costs (groceries, entertainment and discretionary spending).

If you already have a budget, revisit it with a fresh perspective. Have your financial circumstances changed? Are there areas where you can cut back or allocate more funds toward savings? By regularly reviewing your budget, you can identify opportunities to reduce unnecessary spending and set realistic financial goals.

TACKLE DEBT STRATEGICALLY

Debt can be a major obstacle to financial success, but tackling it strategically can make a big difference. If you’re juggling multiple debts, consider consolidating them. Debt consolidation involves combining several debts into one loan with a single monthly payment, potentially at a lower interest rate and/or reduced term.

Alternatively, refinancing could be an option if interest rates have dropped since you first borrowed. This can lower your monthly payments and save you money over time. Talk to your financial institution about your options and choose a plan that aligns with your budget and goals.

SAVE FOR RETIREMENT

Retirement may seem far off, but saving for it early can give you a significant advantage. Compound interest allows your savings to grow exponentially over time, so the sooner you start, the better.

If your employer offers a retirement plan like a 401(k), ensure you’re contributing enough to take full advantage of any employer match. If not, consider opening an Individual Retirement Account (IRA). Even small contributions can add up over the years. Make retirement savings a non-negotiable part of your budget, just like any other monthly expense.

PARTNER WITH A LOCAL FINANCIAL INSTITUTION

Choosing the right financial partner can make all the difference in achieving your goals. Local financial institutions, like credit unions, often offer personalized service, lower fees, and competitive interest rates on loans and savings accounts compared to big banks.

Credit unions, like UMassFive, are member-focused, meaning they prioritize your financial well-being rather than maximizing profits. They also provide financial education and tools to help you make informed financial decisions. Working with a credit union can give you the support and resources you need to navigate your financial journey.

START THE YEAR STRONG

Setting yourself up for success doesn’t have to be overwhelming. By creating a budget, managing debt wisely, saving for retirement, and working with a trusted local financial institution, you can take meaningful steps toward achieving your financial goals in 2025.

Remember, consistency is key. Regularly reviewing your financial plan and making adjustments as needed will keep you on track. Here’s to a prosperous new year!