Financially Free Gen Z
Episode 5: New Year, New Financial Resolution
Emma: Welcome to Financially Free Gen Z. I'm Emma Barger, a Marketing Specialist at Coulee Bank.
Rachel: And I'm Rachel Munger, a Communications Specialist at Coulee Bank as well.
Emma: And in today's episode, we will be talking about New Year's resolutions, more specifically our financial resolutions and goals. We will cover how to set timelines for our financial goals, what characteristics our goals should have, and some examples of financial resolutions we can follow this New Year. We will also hear from Brianna Kane, who will help us answer some commonly asked questions.
Rachel: When we're setting our financial resolutions. We need to envision our future, so we need to think about where we're going to be in five years, ten years, 20 years, and then categorize our goals accordingly. So a short term goal may be something that you want to reach by the end of this year versus a long term goal. Might be like how much you want to have saved for retirement and stuff.
Rachel: And it's good to think about all of that stuff initially and know that financial goals can change and be altered throughout your life and your life stages and stuff. But to still be cognizant of where you want to be 20, 30 years down the road so that you can set yourself up for success.
Emma: When setting any sort of goal, but especially financial goals, it's important to use a strategy. The smart goals strategy is a great one. Smart stands for specific, measurable, attainable, relevant and timely. We want our goals to have attributes, because it makes them realistic and gives us guidelines for “S” stands for specific, and this is when you want to specify the tasks you need to complete in order to reach your goal.
Emma: “M” is for measurable, and this is how you'll decide how you track your progress. “A” is for attainable. The questions you should be asking yourself when it comes to this is is the timeline doable? Does any part of the goal feel overwhelming? It's important for us to ask questions and evaluate our progress so that we can set realistic expectations. The “R” in SMART stands for relevant.
Emma: We should consider if the goal aligns with our personal values and our desires for the future. And lastly, “T” is timely. It's important to set timelines for reaching our goals so that we can break the big goals down into smaller ones and set deadlines for those ones as well.
Rachel: Yeah, definitely. And that's how we can kind of determine if we've had success in that goal, is if we have all of those attributes, we can then use that to measure it. Next, we're going to talk about some examples of financial goals. So Money Under 30 recently released an article with 15 different financial resolutions that we thought we would share.
Rachel: To give you some inspiration in this New Year. And this money under 30 is a great resource. They've got a ton of different articles and resources regarding financial literacy for people kind of in our similar life stage, so I highly recommend you check that out. We're going to share five of these 15 resolutions and then we'll link the rest of them in the show notes.
Rachel: So financial resolution one would be building an emergency fund, so it's recommended to have six months of saving saved up in case of emergency. And this can seem kind of daunting initially because like overnight, it's not like we're going to have $10,000 saved up for an emergency fund. But if it's a goal you set to reach within a year or two, you can slowly work up to be in that be in that area where you're more financially secure should some sort of emergency or something happen.
Rachel: So that would be goal number one. A way that we can do this is by starting a budget. And we have discussed this one pretty extensively in one of our earlier episodes. But budgeting helps you control where your money is going each month rather than wondering where it all went. So these kind of can go in conjunction where if you're budgeting, you can set 100 or a few hundred dollars every month to go towards your emergency fund to then build that up to be in a good spot.
Rachel: Another financial goal would be to start investing. And this one can also sometimes seem daunting, but it doesn't necessarily have to mean you're going to go invest all your money like traditionally in the stock market on your own. That's not probably a smart way to go about it, but it can look like starting contributing to your employer's 401k where you're getting a match where there is a little bit more protection.
Rachel: Still always risk involved in investing. That's just a fact of investing. But there's different ways that we can go about that. So if you are employed, you can reach out to your human resources department to get more information about your 401k plan. Another financial goal number four would be paying down your student loans. And so we're obviously in a weird time right now where we don't really know what's going to happen, but a lot of us have more than the ten or $20,000 in forgiveness we may or may not get.
Rachel: And so this can be a really great time to start kind of aggressively working at that one, since federal loans aren't collecting interest for the next few months. So I'd highly recommend looking into that one to see if you can try to set yourself up for success in the future. And then lastly, goal number five would be to build credit.
Rachel: This is only going to help you out in the long run. I'm in the process right now of trying to buy a house, and when you're younger, you have less years to build credit, and so that's something that negatively affects your score. So really, if you're in like a responsible position, the sooner you can start, the better.
Rachel: It's only going to help you as long as you know all the ramifications that it can have. And we have a great podcast episode all about credit. You can go listen to that for some more information. In this next year some of my financial goals, as I mentioned before, like buying a house is one of them. It's something my husband and I have been working at for a few years now, and hopefully we'll see it come into fruition by the end of this year.
Rachel: And then we're also just working on student loans like a lot of people. So how about you Emma, do you have any financial goals this year?
Emma: I do. I have quite a few and I'm trying to narrow them down. So that, you know, I can follow that smart goal and really focus on the attainable aspect of that. But like you said, Rachel, student loans, that's a big one for me. I recently refinanced my loan, so that helped. But now, especially with the federal loans interest being paused, I am trying to tackle that as fast as possible.
Emma: And then unfortunately, kind of fortunately, I will probably be needing a new car this year. So working car payment into my budget will be something I really have to focus on and evaluate going forward. Those are my two big ones. I have little tiny ones, you know, build up my savings account to “x”, you know, use my credit card so many times a month.
Emma: But those are my two two main focuses that I hope to figure out sooner rather than later. So that I can set myself up for success. All right. Next up, we have a guest from Coulee Bank. With us today. We have Brianna Kane, a business banking assistant with Coulee Bank. Thanks, Brianna, for joining us today and sharing your knowledge with our audience.
Brianna: My pleasure.
Emma: So one of the first questions we have for you today is what is some advice you would have for those looking to set financial goals in this new year?
Brianna: I think that one of the most important things to do is see where you're at. Like, take a snapshot of what your finances are, and that includes like your student loans, your credit score or your savings account. And then once you see what your starting point is, then you can realistically tackle all of those goals. Knowing where you're starting is a really good way to know how to move forward.
Rachel: Yeah, that's one of my least favorite things to do is kind of that evaluation stage of like breaking down my monthly spending. Where is this money go? Oh, wait, I spend how much on eating out? That's like a constant, but definitely a good, good starting spot for any time. You're trying to set a goal. How do you determine what financial goals are within reach?
Brianna: Well, after taking that snapshot of where you're at, I like to evaluate, like you said, all of my expenses. That includes like annual things like your car registration, that kind of stuff, the monthly payments, and then also factoring in like your oil changes, like those things that you don't think about until it's time and you see that light on your dashboard.
Brianna: And so that is something that you're able to see what you have to spend your money on so that you can set those goals for them to be realistic. If you set your goals too high and you don't reach it, there's that lack of motivation to keep going. So it really is seeing what is possible instead of kind of like striving too far.
Emma: Yeah. What are some ways that we can cut spending in this new year? I know I might have to redo my snapshot, my starting point at this point in time because my spending has just been a little bit crazy since the holidays. But yeah. What are some ways you think we could cut it?
Brianna: I think that the best thing to do is right now, if you think about it, all of us have at least one subscription. And like myself, I just realized that, like, my cricket subscription, I don't use it. So that's like $10 a month.
Rachel: I didn't realize that was subscription based. Yeah.
Brianna: Hmm. It's like an option, but I opted into it. But with the holidays and everything, I didn't use it and I don't see a need to use it in the near future, so I canceled it. So that's $10 a month and that goes towards like coffee or anything else. So that you can have a little bit of that treat in your budget.
Brianna: But you aren’t surprised also if you forget about that subscription when it comes out of your account and you can you you have a better idea of what payments are happening when they're happening. And again, that snapshot super important to find those things that you're not using.
Rachel: Yeah, that's me Every month with Paramount Plus I like bought it right when it came out because I wanted to watch all the seasons of Survivor. And it turns out the early seasons of Survivor are terrible. And now I've been paying for the subscription for like two years that I don't use, so I should really go do that.
Rachel: What strategies do you have to help yourself stick to your financial goals?
Brianna: I am a like prize motivated person and so I have different fun things that I treat myself with once I reach a goal. So my husband and I, we have set financial goals and since we reach them, our treat is to take our kids to Disney World this year. And so it's super fun. And we're Disney people, so it was a huge motivation to reach our goals.
Brianna: And again, it's it's a spendy treat. But I believe that if you treat yourself, then you have that motivation to reach your goals.
Rachel: I'm just now thinking about your cute little family at Disney World and it makes my heart so happy at like your kids. That's going to be such a special memory. That's so fun. So I think my biggest take away from that was just talking about canceling subscriptions. I know I've got stuff that I need to cancel and that would.
Rachel: Yeah, allow me to have more room in my budget for for savings or for those goals that I want to reach.
Emma: Yeah, I agree with the subscriptions part of it. I have no idea how many subscriptions I'm paying for right now. But after spending some time watching some shows last night and flipping through all the different streaming services, I'm sure I have a couple that I could get rid of or at least, you know, get rid of for now.
Emma: I also really like the idea of doing another yearly snapshot. I know I did one after our budgeting episode, and although that was only a couple of months left of 2022 when I did that, just being able to reset and refocus on the new year will be will be good.
Rachel: Well, yeah, we just wanted to say thanks, Brianna, so much for sitting down with us and discussing financial resolutions. It was really awesome to have you.
Brianna: Yeah, thanks for having me.
Rachel: Thank you so much to our audience for joining us. We encourage you to follow our podcast forever your streaming, so that you can be the first one to see when a new episode drops. We look forward to talking with you again next month and thank you for listening.
