Here comes 2018, are you ready financially?

If you’re like many people I know, myself included, you’re wondering how the year has gone by so quickly?!?  The Holiday Season brings along with it various to-do’s, some more fun than others.  Often times one of these less than fun items are reflection upon our personal financial situation; and then some resolutions for the coming new year.  Even if you’re still in school, it’s important to be ready for what is coming your way in the financial world:

So, what should your personal financial resolutions for 2018 include?

1.       Thoroughly Review Your Credit Report & Sign Up for Credit Monitoring or Identity Protection

We all should review our credit reports on at least an annual basis to spot signs of fraud or mistakes, checking directly with one or all of the three major credit bureaus; Equifax, Experian and Trans Union is best; other providers may not be as accurate or presented in the same formats.

And what is your Credit Score?  700-749 is good, above that is considered excellent.  650-699 is fair, below that is considered poor.  What does it matter?  Credit scores can qualify us for things we want like purchasing something with credit or getting an apartment rental, and the better your score, the more money you can save on the costs of getting credit.  For example, a higher credit score often means a lower automobile loan interest rate or lower insurance rates. Also consider enrolling in for credit monitoring or an identity protection service – there are a number of providers out there; again, the three major credit bureaus can provide guidance. 

2.       Pay Bills Right After Receiving Your Paycheck

Taking care of monthly obligations before allowing yourself to indulge in discretionary expenses is a helpful budgeting strategy. 

3.       Create or Add to Your Emergency Fund

Over half of all Americans do not have a rainy day fund. An emergency fund in the event of prolonged unemployment or significant unforeseen and unavoidable expenses can be critical to your financial well-being. Financial experts recommend building a fund with about 12 to 18 months’ take-home income, but this doesn’t happen overnight.  The important thing is to start saving for this and other material goals that you may have; retirement (you cannot start too soon on this one), higher education (whether for trade school or college for yourself or dependents) or possibly for a downpayment on a home. 

4.       Make a Realistic Budget & Stick to It

Americans will have racked up over $80 billion in new credit card debt this year.  Don’t let this happen to you! Credit card debt is easy to get in, not so easy to get out of!  A good rule is to not use credit cards for more than you can afford to pay in one month. For budgeting, gather your bills from the past few months and make a list of all your recurring expenses. Then rank them in order of importance, with true necessities such as housing, food and health care obviously taking the top spots. After that, cut from the bottom of your list until your take-home pay exceeds what you plan to spend and put toward savings.

5.       Begin Using Personal Finance Software

See #4.  Budgeting today should include one of the many personal finance programs available (Mint and Nerd Wallet are two user friendly ones). Knowledge is power. Knowing where you’re spending your money is key to achieving your financial goals.

6.       Get an A in Financial Literacy

Financial literacy levels in this country are far too low. In fact, only 57% of U.S. adults are financially literate, according to a 2016 survey by Standard & Poor’s. It’s important to understand how credit, budgeting and savings can work to make our lives more financially rewarding.  And like it or not, money matters do factor into our overall happiness. Take the WalletLiteracy Quiz  at to establish your baseline score. Then, throughout the year, study the areas where you struggled and periodically re-test yourself to gauge your progress. Your goal should be to get at least an A- by the time 2019 rolls around! If you’ve been successful with all six of these resolutions by December 31, 2018, you can consider it a great success in building your financial future!  Happy Holidays!

-James M. Miller, Chief Operating Officer - TowneBank Mortgage

-James M. Miller, Chief Operating Officer - TowneBank Mortgage