Your #1 Financial Resolution. Start the New Year Strong with Automatic Deductions!

As the new year approaches, it’s a great time to consider simple strategies that significantly impact your financial goals. One of the best ways to build wealth is by setting up automatic deductions; even small, regular contributions can make a massive difference over time.

Automatic Deductions:

Consistent Saving and Growth

Automatic deductions help you save consistently, removing the temptation to spend that money elsewhere or forgetting to contribute. Here are two primary goals where automatic deductions can really payoff:

• Emergency Fund: Having an emergency fund is a pillar of an investment strategy. If you don’t have a fund with 3-6 months of essential living expenses, this is the first place to start. Automatic deductions can make building this safety net consistent so you can build the funds you need.
• Retirement Fund: A regular retirement contribution to a 401k, IRA, or investment account—even if it’s a modest amount—will grow through the power of compound interest, maximizing the impact of each deposit. Where possible, try to meet your employer match, at least if you have a 401k, free money toward your retirement that you don’t want to leave unclaimed.
  
  

Why Regular Contributions Matter:

The Power of Compounding

If you think a small amount won’t make a big difference, think again! A $50 monthly contribution, invested at an average annual return of 6%, could grow to over $8,000 in 10 years; that’s an additional $2000 over the total contribution amounts. This growth comes from your contributions and compounding, where your gains generate additional returns over time.

Compounding is particularly impactful for retirement savings. By reinvesting earnings, your investment grows on itself. Over the years, compounding can add significant value to contributions, especially if you start early.

Set a New Year’s Savings Automatic Contribution Goal

Building wealth doesn’t require a large, one-time deposit. Instead, it’s all about regular, manageable contributions that add up. Here’s a challenge to kick off your goals:

• Review your budget and identify if you can increase your regular contribution. Even a small amount matters, so choose an amount you can be consistent with. Pick an amount you know you won’t have to change, even during tighter financial times.
  
  
• Set up or adjust an automatic deduction for your emergency fund or retirement account.
  
  

Every increase helps! Automatic contributions can make it easy to stick to this commitment. If you need help setting up or adjusting your automatic contributions, please reach out. We’re here to help you start the year strong!