Does sticking to a budget work?
While many Ohio consumers plan to start 2017 off with a household budget/Personal Spending Plan (I like to use the term Personal Spending Plan (PSP) instead of budget. Budget sounds too restrictive and that is not what a PSP is), sticking to that PSP may pose a problem. Data from a consumer survey conducted by the Ohio Credit Union League reveals 75 percent of respondents plan to start the New Year off with a household PSP, but 45 percent of those respondents said they need a lot of improvement when it comes to sticking to a PSP.
Also revealed in this survey was that 70 percent of Ohioans are looking forward to a milestone event in 2017, such as a wedding, the birth of a baby, or a vacation, all of which require months of planning.
Managing money is often a top New Year’s resolution for Americans. In Fact, 34 percent of Americans make money-related resolutions at the beginning of a new year, according to the 2016 Brain Research Institute. Unfortunately, only 46 percent of people who make a resolution maintain it longer than six months and only 8 percent achieve their goals.
With so many missing the mark on their goals, what can consumers do to get on the right financial path this year? Here are the first steps to getting finances in order before creating your PSP.
• Save receipts. It’s hard to know how to start planning if you don’t have a good understanding of how you spend. Save your receipts for a month to track where you’re spending money. Then, add them up and compare your income. After doing this, ask yourself if you’re saving any money and what purchases maybe weren’t necessary.
• Put the bare minimum in checking. Only put a planned amount of money into a checking account for spending each month and put the rest into a savings account. Making money less accessible can help you spend less.
• Get a special savings account. Open a Holiday or Vacation account at ProMedica Federal Credit Union. These types of accounts keep you from scrabbling before last minute events, which can ruin any PSP. The Holiday account only allows a certain number of withdrawals each year to help keep you on track.
• Get a PSP/budgeting app. Download an app to your smartphone or tablet to help with you plan. Many financial apps include planning platforms, monthly account monitoring, and tips for getting out of debt. According to GotToBeMobile.com the best 2017 mobile PSP/budgeting apps include; Mint, PocketGuard, You Need a Budget, GoodBudget, and Mvelopes.
ProMedica Federal Credit Union in partnership with the ProMedica Ebeid Institute and Toledo Community Foundation will also be offering financial seminars throughout the ProMedica footprint including how to Create a Personal Spending and Personal Savings Plan. Please check the events area on our Facebook page for upcoming seminars.