A new year means new resolutions. Usually, most resolve to lose a few pounds or reduce stress, focusing on their mental and physical health. But the new year is also the perfect time to reflect on your financial health and do a financial reboot.
John Uremovich, Senior Vice President Professional Services at Bridgewater Bank, shares how he helps clients start the new year off on the right financial foot.
“Over the last ten years, we’ve experienced a rate market that’s been really low with home mortgages as low as 3% or 4%,” explains John. “But with inflation, we’re now in a rising rate environment which means you can start making your cash work for you.”
Before the rate environment flipped, if you had cash sitting in the bank, you were getting nothing for it since banks were lending out at low percentages. The trend John is seeing now in the industry is banks looking for deposits to fund their loan growth, meaning you can start getting a decent return on your deposits.
“This is incredibly helpful for seniors and those on a fixed income,” says John. “For my clients, I offer a good money market rate to get their cash working for them. I encourage everyone to talk to their bank and see what they can pay on the liquid money market account.”
John also advises now is the time to look at your savings and financial planning. “No matter where you are in life or what stage of your career, get in front of a financial advisor and create a comprehensive plan,” says John. Your financial advisor will help you discern if you’re getting the maximum benefit from your 401K, if your retirement plan is on track, navigate life insurance policies, and when the right time is to invest in stocks and bonds.
So as you make your resolutions this new year, ensure you also include a plan for your financial health.
1. Relationship Banking Over Transactional
Establish a relationship with a bank rather than work with several different institutions. “When you have a need down the road like purchasing a car or home, the bank is more apt to work with you and provide a better deal,” says John.
2. Know Your Credit Score
Speak with your bank or financial advisor to learn best practices for a good credit score and what actions hurt your score. Missing or late payments leads to lower credit scores and higher interest rates, making it more difficult to get financing for big purchases.
3. Protect from Identity Theft
John recommends investing in identity theft protection like NortonLifeLock. “It’s an inexpensive and great insurance policy. You’ll receive an alert if someone is using your social security number, and if it wasn’t you, you can shut down the transaction.”
4. Time is Everything
The best thing on your side is time. Start saving now with a high-yield interest money market account, taking advantage of the current rising rate environment to save up for retirement or a future down payment.