By: Jessie Chrobocinski
Fall is an excellent time for a financial checkup. With the holiday season fast approaching, not to mention the current pandemic, checking in on your financial goals is more important than ever. A financial checkup can help to eliminate additional stress and maintain stability for the rest of the year. With the help of Hilary Davis, local self-proclaimed avid budgeter, and Assistant Vice President of Credit Operations at Kleberg Bank, we put together 5 tips to improve your financial wellness this Fall.
Set a holiday budget
A holiday budget should start the same as any reasonable budget. Figure out how much you have to spend after paying for the essentials.
“Sometimes the holidays can derail you. I typically start budgeting at the beginning of each year,” says Hilary. “I have an idea of what my holiday expenses will be, and I take into consideration gifts, including wrapping paper, ribbons, and even shipping costs. If you have family out of town, it’s good to also think about travel expenses – flights, hotels, that sort of thing.”
Adjust your spending habits
Hilary says building a budget is really about understanding what your priorities are. She suggests setting aside money for the highest priority items, such as a mortgage or car payment. Then cut back on splurging to lower your budget and assess how much you have to spend.
“The best thing that someone can do is to make a budget,” says Hilary. “A lot of people have a negative connotation when they think about budgeting, but it’s really about giving every dollar a purpose. It’s good to take some time when you’re not in the moment – when you’re not at the store to decide where you want your money to go.”
Digitize your finances
Handling investment decisions, managing your funds, and sticking to your budget is easier than ever with personal finance apps’ help. Hilary recommends checking out budgeting software, including her personal favorite, You Need a Budget, to find the one that works best for your budgeting style. While some software may require a cost upfront, the benefit outweighs the savings you can earn from giving each dollar purpose.
“Don’t decide whether you can afford a new pair of shoes when you’re already in the store trying them on, looking in the mirror how fabulous they are,” she continues. “Budgeting doesn’t mean that you can’t treat yourself every once in a while, but you need a plan so that you can set your priorities.”
Balance your financial wellness
A healthy balance between living in the moment and preparing for the future applies to finances too. Preparing for the unexpected and having confidence in where you spend helps to achieve mental well-being—understanding how to use your money in a beneficial way for yourself. Hilary suggests putting money towards the things that make you happy.
“My husband and I have an entertainment budget we use for fun, like going to the movies or a concert. We know that we want to put a certain amount towards that budget, so when events or activities come up, we don’t feel guilty about spending that money,” says Davis.
Minimize the need for credit
Minimizing credit used during the initial budget and savings planning can be challenging. Still, Hilary says the key is to look ahead at significant expenses. Even if the amount you put away is just $50 a month, the amount adds up. “Minimize the loan or credit you’ll need to take out by saving far enough in advance. Paying out of pocket will save money in the long run by not having to pay interest,” Davis says.
Hilary recommends reaching out to your bank or a financial adviser to determine how much you should be saving and what those significant expenses in life will be.
“From all my experiences, it’s free to start that conversation. They may try to encourage you to invest in some of their products. Still, by getting the conversation going, they can help you figure out a personalized plan to start saving,” Hilary says with a friendly tone. “A great feature that Kleberg Bank offers is a savings account auto transfer. Funds are transferred into savings in alignment with when paychecks are deposited – making it a lot less tempting to spend those amounts with segregation into a different account.”
A new season is great to check in on where you are and what you’re doing, and if any adjustments are needed. With the end of the year in sight, revisiting your finances will help you finish out the year strong and set you up for a better year (we’re looking at you 2021).