November Financial Fitness Challenge�Be Bold, Think Small

Big goals call for big moves: Paying off a large credit card balance, or saving a meaningful emergency fund, for example, requires as many resources as you can throw at it.

Sometimes we psych ourselves out of achieving our goals by magnifying what's required to make progress. If you want to build your emergency savings cushion to the recommended three to six months' expenses, it can seem too big a job.

You postpone taking any steps at all because you aren't in a position to make that big step�"go big or go home" syndrome. You're defeated before you start. In fact, you get big results from small efforts�as long as they are small efforts you make consistently over time.

One small step for you, one giant leap for financial fitness

Consider some small moves that add up to big progress:

Save: Use direct deposit of your net pay to your credit union checking account, then automatically transfer at least 3% to savings; increase the percentage with each raise or bonus. Take advantage of your employer's 401(k) or 403(b) plan by saving at least enough to earn the company match; increase the percentage with each raise or bonus. Spend: Eat out less. Buy a few generic brands instead of name brands. Postpone a big discretionary purchase one month, then decide if you need it at all. Push the decision off at least one more month, then re-evaluate. Pay more than the minimum on your credit cards. Switch to a credit union credit card if you don't already have one. You'll pay a lower interest rate and skip the nasty surprises most big banks specialize in. Share: Make charity contributions by payroll deduction where you work. Make contributions to your place of worship by electronic funds transfer.

Fedder by fedder

"Fedder by fedder," my dad used to say. What's that? "That's how little birdies build their nests."

You wouldn't tackle all these ideas at the same time�that defeats the whole idea of making small steps to earn a big future payoff. You might adopt one or two practices each month or every other month as you move forward�consistently�on your goals.

Make your own list. It could include refinancing your car loan, or your mortgage, at the credit union. Then divert the savings into your emergency fund. That's how you build your nest.

Financial Fitness Challenge

The Great Recession has refocused everyone's attention on financial fitness. Credit Union National Association economist Mike Schenk says, "Consumers have collectively realized the need to rebuild net worth the old-fashioned way�by spending less and adding to savings and investments." The people at your credit union specialize in helping members achieve their financial goals.

Don't forget to register for the Financial Fitness Challenge. Each month we'll randomly select five winners to receive $50 Visa gift cards; we'll choose each month's winners only from that month's entries, so enter often.

ST
Susan Tiffany, CCUFC
[email protected]

Published November 9, 2009