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Breaking Bad - and Building Good - Financial Habits


Each year, we set goals and find new ways to better ourselves. Whether we want to lose weight or pay off debt, it’s hard to achieve our goals without a plan. They say it takes 21 days to form a habit, but a lifetime to break bad ones. And we couldn’t agree more – change is hard! 

Rock Valley Credit Union is here to help you break bad financial habits and build healthy, good financial habits in the process. January is the perfect time to hit reset and get your finances on track for the year ahead. 

Check out these five tips from RVCU’s Lending Support Manager Kim so you can establish and build good financial habits:

Tip #1: Run your credit report 

Getting a copy of your credit report provides insight into what improvements can be made. To help build better credit, we recommend prioritizing: 

  • Paying off debt  

  • Setting up payment plans to pay off any collections listed 

Your credit score will improve as debts and collections are paid off. 

Click here to get a free credit report. 

Tip #2: Start debt stacking 

Debt stacking is an interest rate-focused method of paying off your debts. Your target account, or the debt you’d pay off first, is the one with the highest interest rate. While still making the minimum payment on all other outstanding debts, with debt stacking you allot more of your budget towards your highest interest rate debt until it’s paid off. Then, you’d apply that payment to the next highest interest debt, and so on. 

For example: Sam has the following cards to pay off:  

  • Capital One credit card with an interest rate of 23.99% and a payment of $95 per month 

  • Kohls credit card at 17.99% with a minimum payment of $25 per month 

  • Discover credit card at 18.99% with a payment of $121 per month 

Sam would start with his Capital One card and pay the minimum payment; plus, any extra money he has that month while also making his minimum payments on the Kohl’s and Discover cards. Once his Capital One card is paid in full, he moves on to his Discover card since it has the next highest interest rate. He would then make additional payments towards his Kohl’s card once his Discover card is paid off.  

Tip #3: Build a budget 

The first month of the year is a great time to build a budget and establish good financial habits. Here’s how to build a budget to help you stay on track: 

  • Determine how much you earn and spend in an average month by reviewing several months of bank and credit card statements 

  • Review your expenses. It might help to reevaluate monthly expenses and make some easy adjustments (like limiting that Starbucks run to only once per week). 

  • Make a list of your monthly bills including the amount and due dates. This allows you to keep track of your necessary expenses each month.  

  • For car payments and mortgages, which typically have higher monthly payments, separate these into two monthly installments so it is easier on the checkbook. 

  • Set up automatic payments for things such as gas, electric, car payments and mortgages. 

Tip #4: Save money 

This may seem basic, but it can be hard to do. It’s okay to start small! Setting a goal of putting $25 into a savings account on a biweekly basis will amount to $650 by the end of the year.  

You can also save money by maximizing any rewards points available to you! Take advantage of credit or debit card rewards point programs and redeem your points for gift cards or cash back when possible. At RVCU, every checking account holder has access to a Rock Rewards VISA debit card so you can get rewarded for all your everyday purchases.  

Tip #5: Maximize retirement contributions 

You are never too young to start saving for retirement. Many companies offer to match retirement contributions up to a certain percentage. Best practice is to contribute at least the amount your employer will match. Otherwise, you’re leaving money on the table.  

Utilize the tips listed above to create a plan that will help you reach your 2023 financial goals and build good financial habits. Small, consistent adjustments will make a big difference over time. Use resources that are at your disposal like the free credit report site, your employer’s retirement contribution match, and meeting with a financial planner to kick off your journey towards financial wellness.   

At Rock Valley Credit Union, we offer our members complimentary financial coaching services to help pay off debt and build other good financial habits. Connect with one of our certified financial coaches by sending us a message in our chat feature during regular business hours, completing our online form or calling us at (815) 282-0300.  

Make the best of your 2023 and build good financial habits!