Spring Clean Your Finances

Are you ready to make your finances sparkle? Here are six ways to spring clean your money matters:

Sweep out your budget

It’s time to shake the dust from your budget! Pare down your spending until your budget’s looking neat and trim.

Freshen up your W-4

If you received an especially large refund this year, you may want to adjust the amount you withhold. The IRS’s tax withholding estimator can be a useful tool to help you determine the perfect number.

Deep clean your accounts

Do a Marie Kondo on your finances and get rid of any accounts you no longer need. For instance, are there dormant accounts at a financial institution you no longer use, or a 401(k) from your old job? Consolidate it. A minimalist approach to your finances will make it easier to manage your accounts, give your savings a greater chance at growth and help you avoid fees for unused accounts.

Toss out your debt

If you’ve been stuck on the debt cycle, make this spring the season to break free.

First, trim your budget, designating any extra funds for your debts. Next, choose a popular debt-busting approach, such as the avalanche method, in which you pay off debts in order from highest-interest to lowest, or the snowball method, where you start with the smallest debt and then move up your list. Going forward, maximize payments to the first debt on your list, making sure not to neglect minimum payments on the other debts. Before you know it, that debt will be gone!

Dust off your saving habits

Get into the habit of maximizing your savings with a tangible financial goal. You can also make savings an itemized line in your budget so you have funds set aside for this purpose. Finally, automate your savings by setting up a monthly transfer from your checking account to your savings account.

Make your investments sparkle

It’s time for a spring cleaning for your investments! Check if your allocation strategy is still serving you well, whether you need to adjust your diversification, and if your retirement accounts are on track for your estimated retirement timeline.

Follow our tips to make your finances shine!

Products for Managing and Tracking Business Expenses

Running a flourishing business means overseeing a constant flow of money. Luckily, though, there are products that can help you with managing and tracking business expenses effectively and smoothly. Let’s take a look at some of them.

Business checking accounts

A designated business checking account can help with managing and tracking business expenses, taxes and revenue. Separate accounts also protect business owners from losing personal assets if action is taken against the company. A business checking account is used to deposit checks made out to their company and to cover business expenses, such as payroll or paying suppliers.

If you’re looking to open a business checking account, a High Point Federal Credit Union Business Checking Account can be a great choice. Learn about our business checking account and its convenient features by clicking here.

Business savings account

A business savings account is an account designated for funds to be used in case of emergency or for future business expenses. The money in this account will grow at a greater dividend rate, but access to funds is more limited.

Opening a High Point Federal Credit Union Business Savings Account will provide you with a competitive dividend rate and a variety of terms. If you’re ready to open a business savings account, call, click, or stop by High Point Federal Credit Union today.

Business credit card

A business credit card provides small business owners with easy access to a revolving line of credit. Business owners can use the credit to cover large expenses, make purchases, or meet monthly bill payments.

A business credit card is easier to qualify for in comparison to a business loan, but will nearly always have a higher interest rate. If the business owner is careful only to use the credit card when it is absolutely necessary and pays the bill before it’s due, interest will not accrue.

If you’re looking to open a business credit card, look no further than High Point Federal Credit Union. We offer business credit cards for small businesses as well as options for larger businesses with multiple users. Learn more about our business accounts and services by calling (716) 372-6607 today!

How to Create a Budget in 6 Easy Steps

If you’re always wondering how you’re going to pay the next bill, feel guilty when you indulge in overpriced treats and you just can’t find money to put into savings, you might need to create a budget.

A budget will help you gain financial awareness, which will help facilitate more responsible decisions.

Here are 6 easy steps to create a budget:

Step 1: Gather your financial information

Collect all your financial documents and receipts for three consecutive months. This includes all account statements, bills, pay stubs, receipts and more.

Step 2: Tally up your totals

Divide your documents into expenses and income. Then, list the corresponding numbers on a spreadsheet. As you work through these lists, include occasional and seasonal expenses, dividing their totals by 12 to spread them evenly throughout the year.

When you have your numbers, take a look at how they match up. If your expenses outweigh your income, trim your spending and/or look for ways to boost income.

Step 3: List all your needs

Take a look at how you’ve spent your money in the recorded time and identify all the actual needs. This includes fixed expenses like mortgage/rent payments, savings, insurance premiums and car payments; as well as fluctuating but necessary expenses, like groceries. To keep it simpler, list your fixed expenses first, followed by your non-fixed expenses.

As you list each need, write down its corresponding cost. When you’ve finished creating this list, add up the total.

Step 4: List your wants

Your next step is listing the stuff you love but can really live without. Include entertainment costs here, as well as eating out and expensive hobbies.

Here too, jot down the monthly cost of each item and tally up the total when you’re done.

Step 5: Assign dollar amounts to expenses

Open up a new spreadsheet, and copy your list of expenses, starting with the fixed-cost needs, then your non-fixed-cost needs, and finally your wants.

Next, assign a specific dollar amount to each expense category. If your budget allows, you can use the average amount you’ve spent in each category for the last three months to set the cap for that expense.

Continue until every dollar is accounted for and you have enough money in your budget to cover each need, want and occasional expense. If expenses outweigh income, you’ll need to trim some expenses for your budget to work.

Going forward, be sure to spend only the assigned amounts for each expense category.

Step 6: Review and adjust as necessary

Review your budget monthly to see if you’re staying on track. If you consistently overspend in a category, spend less in a different area so you have more money available to meet your needs.

The Importance of being Financially Fit

Being financially fit is crucial for a well-balanced, stress-free life. Here’s why (and how):

Expand your financial knowledge

A financially fit person is constantly broadening their money knowledge. They read personal finance books and blogs, attend seminars and are aware of the evolving state of the economy. This enables them to make money decisions from a position of knowledge and power.

Stick to a budget

A financially healthy person knows that tracking monthly expenses is key to financial health. They are careful to set aside money from their monthly income for all fixed and discretionary expenses, and to stay within budget for each spending category.

Minimize debt

A financially fit person is committed to paying down debts and seeks to live debt-free. Constant budgeting, ongoing financial education and planning ahead enables them to make it through the month, and through unexpected expenses, without spiraling into debt.

Maximize savings

A financially healthy person prioritizes savings. This allows them to think ahead and build a comfortable nest egg or emergency fund. In turn, having a robust safety net means sleeping better at night knowing there’s money available to cover unexpected expenses.

Maintain complete awareness of the state of your finances

A financially fit person knows exactly how much money they owe, the accumulated value of their assets and the complete sum of their fixed and fluctuating expenses. This awareness takes the stress out of money management, allowing them to make better financial choices.

Maintain a healthy credit score

A financially fit person knows that an excellent credit history and score are crucial factors to long-term financial health. They are careful to pay bills on time, hold onto credit cards for a while and to keep credit utilization low. This helps them qualify for long-term loans with favorable interest rates, which saves them money for years to come.

Create concrete financial goals

A financially healthy person has long-term and short-term financial goals. This enables them to keep their focus on the big picture when making everyday money choices and empowers them to realize their financial dreams.

Achieve financial independence

A financially fit person is independent. By sticking to a budget, prioritizing savings and maintaining an awareness of their finances, they are strong, secure and completely independent.