Have you ever experienced a year that you were happy to leave behind? I confess, I feel that way about 2023. This past year has been incredibly difficult due to many reasons such as the Federal Reserveʼs rate hikes, liquidity tightening, bank failures, consumers relying heavily on credit cards with high-interest rates, inflation, and the rising costs of food, gas, and other essential items.
Between April 2020 and December 2021, the federal government provided financial relief to individuals in theform of direct payments amounting to $931 billion, in response to the pandemic. However, by 2023, many Americans had depleted their savings and were struggling to make ends meet, leading to tighter personal budgets. As a result, people increasingly relied on high-interest credit cards to pay their bills, causing a significant increase in credit card balances. In fact, by the end of the third quarter of 2023, credit card balances hit a record high of $1.08 trillion.
According to YAHOO! Finance, it has become increasingly challenging for consumers to maintain a safety net of savings due to the need for borrowing. The majority of Americans lack significant savings to rely on in times of need, as per GOBankingRatesʼsurvey. The survey indicates that 57% of people had savings of less than $1,000 in both 2022 and 2023. Additionally, one-third of Americans had less than $100 in savings in both 2022 and 2023.
As we begin 2024, it is more important than ever that we begin to save money and work to get our financial balance sheets in order. Here are 5 suggested ways to save money:
1. Set goals that motivate you, like saving for a house, a needed vacation, retirement, or education.
2. Make a budget – and make saving money each month a necessary expense.
3. Cut down on your spending to allow for a savings safety net to grow.
4. Have your paycheck or retirement directly deposited, and place a portion of the dollars into a savings account with each deposit.
5. Pay off unnecessary debt and refinance other debts to lower rates to create additional cash flow.
If you need emergency funds, you can always rely on WV Centralʼs Central Quick Cash loan program. In just under a minute, you can get access to the money you need. This is a fast and simple way to get emergency funds. To learn more about the program, please sign in to your online account.
We are always available to assist our members. Our goal is to work with you in addressing your savings requirements as well as your overall financial situation. You can schedule an appointment with one of our eight Certified Credit Union Financial Counselors who can guide you through the process.
Have a safe, happy, and profitable 2024!
Michael A. Tucker, President/CEO