5 Things You Can Do Right Now to Maximize Your Money
Create a budget
It’s easier than it sounds! First make a list of your income streams – paychecks, disability, alimony, or any other monthly earnings – and compare it to a list of your monthly expenses. There are typically two types of expenses – fixed (housing, car payments, student loans, and other bills that don’t change) and variable (gas, clothing, dining out, etc.) Take a look at your most recent account statements, preferably from the last three months, and track both types of expenses. Once you see where you're spending your money, you can adjust certain categories and start spending more wisely. (Check out this article for several easy budget cuts you can make today!)
Stop recurring payments
Take a close look at your bank account and cancel subscription plans that you don’t use or need anymore. You might be surprised by how much you’re paying for content or items you don’t want! On the other hand, make sure you have automatic payments and transfers set up for the things you do need to pay on time, like rent, cable bills, electricity, credit card bills, etc. so you don’t risk late payment fees.
Plan how to pay off your debt
There are multiple ways to tackle paying off different types of debt like credit cards and auto loans. The two common strategies for paying off debt are the snowball method and the avalanche method. The snowball method is when you pay off your debts one at a time, starting with your lowest balance. The avalanche method works by paying off the debt with the highest interest rate first. A third method is to make extra payments to help pay off debts faster and avoid accruing interest. To help reach your debt payment goals, plug your information into a debt payoff calculator (and don’t forget to set aside money in your new budget to pay toward this category!)
Start an emergency fund
If you don’t have extra cash set aside for an emergency, make this a priority in 2023. As we’ve all witnessed over the past several years, life can be unpredictable so it’s important to have extra funds available in the event of an emergency like car repairs, home maintenance, and unexpected medical expenses. Saving three to six months of living expenses is a good emergency fund goal. If you have considerable debt that you’re working to pay off, start small – consider incorporating a small percentage of your paycheck into an emergency savings account – and then, once your debts are paid off, increase that percentage until you have a sufficient amount set aside.
Check your credit score
It can be tempting to keep your head in the sand about this important number, but when it comes to your credit score, knowledge is power. By checking your credit score and report regularly (the Consumer Financial Protection Bureau recommends at least once a year), you’ll be able to respond to changes quickly, detect and dispute errors, and always make sure your information is accurate and up to date. There are many free credit monitoring tools online (including one available in Metro iBanking). If your score needs work, Metro offers programs and products that can help, including the Credit Builder Loan.
Are you ready to begin your financial wellness journey? We’re here to help. Visit MetroCU.org to open an account, visit any of our 19 branch locations across Massachusetts, or give us a call at 877.MY.METRO.