Get money-smart this Financial Wellness Month

Did you know that the average credit card debt for Americans is over $6,380, according to the Federal Reserve? That adds up to $1.17 trillion, surpassing the $1 trillion mark for the first time in 2024. The New Year marks an opportunity to reflect on your financial habits and set the stage for a successful year – and pay down your credit card debit, if that is one of your resolutions.

January marks Financial Wellness Month, a time to reflect on your spending and financial habits, determine goals for the year, and set plans to achieve them. This guide provides a breakdown of actionable steps you can use to achieve your financial goals. Achieving financial wellness starts with small, easy steps!

1. Start with a financial checkup – Kick off your new year with a financial checkup to assess where you are today:

• Start by downloading your bank account statements to review your income, and spending habits. You can easily track your spending by utilizing the Opportunity Bank mobile app or online banking to monitor your daily transactions and available balance.

• Review your statements for subscriptions or auto-payments that you no longer use.  A survey from Chase found 71 percent of Americans waste over $50 a month on unwanted subscription fees.  Those forgotten subscription charges can quickly add up if you aren’t closely tracking your spending each month. And proceed with caution the next time you sign up for a free trial for a streaming service, or subscription.

• As part of your current status review, review your credit score and standing. With SavvyMoney from Credit Sense, you can access your credit score, view your full credit report, monitor changes with real-time alerts, and get personalized tips to improve your credit score. You can also simulate how financial decisions might impact your score and explore resources to help you build strong financial habits. All of this is available for free, right in our app or online banking.

• Take a quiz to measure your current financial well-being. The Consumer Financial Protection Bureau offers a simple 10 question quiz to help you score your current financial wellbeing and provides steps you can take to improve it.

2. Create a simple, achievable budget that works for you:

• The 50/30/20 rule is one of the most commonly used budget rules, because it is a simple method that is easy to track from month to month. Under this budget plan, 50% of your after-tax income is spend on needs, 30% on wants, and 20% on goals. Needs include all of your non-negotiable items, including your mortgage or rent, groceries, insurance, medical and utilities. Wants are the things that make life a little bit more fun, but that you could live without, like your Netflix subscription, eating out, or travel costs. This budgeting method helps to prioritize payment obligations and easily allows to you see if you’re over (or under) spending in a specific category.

“I am a true believer that everyone needs to sit down and develop a budget and follow it each month. This can make a big difference in your short and long-term finances,” said Brandi Mergenthaler, Opportunity Bank Business Relationship Officer.

• The envelope method is another simple, hands-on approach to budgeting that helps you control spending and stay on track financially. The idea is to label envelopes with your spending categories, such as groceries, entertainment, or dining out, and allocate cash to each one based on your monthly budget. Once the money in an envelope is gone, you stop spending in that category, reinforcing mindful spending

• Prepare for your anticipated expenses that you uncovered during your financial checkup and plan ahead for your summer travel, upcoming graduations, birthdays, weddings, or the holidays in advance. Opportunity Bank can help you avoid 2025 holiday debit, or end-of-year expenses with a Christmas Club Savings account. Set aside as you go throughout the year. Getting started is easy and there’s no minimum balance required. In November, the balance is withdrawn and transferred to an existing Opportunity Bank account.

•  Consider automating your bills through a bill pay system. This can help ensure they’re paid on time and removes the stress of manual payments. This approach may  also help you plan your month more effectively, as you’ll know the remaining balance in your account is what’s available for spending after your bills are covered.

 • Change payment due dates: If your payment due dates don’t align with your payday, it can be difficult to budget or pay your bills. Contact your billers to ask about adjusting payment dates to a day that works better for your payday schedule and monthly planning.

3. Set clear and achievable goals: Small changes can have a big impact on your finances

• Use what you learned in your financial checkup to define clear, achievable financial goals for the short, medium and long term. Break down these SMART financial goals, so that they’re Specific, Measurable, Achievable, Relevant, and Time-Bound. Make smart goals that you can realistically accomplish in 2025. Consider paying off $1,000 in credit card debt by June or create a $500 emergency fund by year end for unexpected expenses.

• Take steps to improve your credit score. Savvy Money, easily accessible within our app or online banking, also offers a Credit Score Action Plan, located within their Credit Score Dashboard, that allows users to see a personalized plan to enhance their credit score. It provides detailed information on actions that can have the most significant impact on their score, aiding users in making informed decisions.

4. Start building your safety net: Prepare for unexpected situations

• Saving money can sometimes feel unattainable, but by starting small and incrementally building your savings can make a big impact over time. Even just $10 put aside each week, leaves you with $520 in savings at the end of the year. This can go a long way towards your unanticipated expenses that may pop up. 

• Make saving easy by making it automatic. Set up automatic transfers from your checking account to your savings account to ensure you save consistently towards your goals and build good financial habits effortlessly.  

• Open a dedicated savings account to keep your savings separate from your checking to avoid the temptation of spending your emergency funds.

5. Simplify your financial life with technology

• Take your bank wherever you go, with the Opportunity Bank mobile app. Use our mobile app to get real-time alerts, transfer funds, deposit checks, control your cards, and more – all from the convenience of your mobile device. Make managing your money easier this month and beyond.

• Eliminate extra steps to the bank by setting up direct deposit and automate what amounts you’d like deposited into your checking or savings account each month. Enroll in account alerts, for notification of when the payment is deposited into your account each month.

6. Celebrate your small wins on your path to success

• Enjoying your successes is crucial to establishing new habits over time and keeping your motivation to keep going, even when faced with setbacks. Small steps like saving your first $100 or sticking to a budget for one month add up to big wins!

• Stay positive – progress beats perfection in the long term!