In Focus – SCCCU Blog

January is a great time to take a step back and look at the way money is actually moving through your life. Not the way you hope it’s moving… but the way it really is! Cash flows are so invisible that it can be hard to tell. But if your goal is to do better financially this year than you did last year, then that starts with one simple shift: being intentional about what stays in your monthly budget and what goes.

No matter what last year threw at you, there are probably still a few things you can let go of as you move forward, and some new things you can add in!

WHAT’S IN: A Clear Picture of Your Priorities (Including Your Debt)

It’s all too common for one financial setback to lead to another, then another, until it can feel like you’ll never get back on solid ground. But, no matter what happened to your finances last year, your first step is the same: Understand exactly what you're dealing with, and what your priorities really are.

That starts with looking at your money from all angles — your goals, your obligations, and the things you want to build toward in the year ahead. Debt may be part of that picture, but it’s not the only part.

If you do have debt, know that not all of it is created equal. There’s “good debt,” like a mortgage or student loans, which can contribute to your future financial success. And there’s “bad debt,” like credit card debt, which can drain your savings as you struggle to pay down high-interest debt.

If you’re juggling both, your first financial priority should be to pay down the bad, higher-interest-rate debt first. Start by listing out all your debts by interest rate, which will give you a clear sense of which debts to prioritize. But your priorities don’t end there.

At the same time, you’ll want to build a safety net, so you never have to rely on credit cards or take on new debt if a financial emergency arises. This is where an emergency fund comes in.

How do you do both? By compartmentalizing — in other words, dividing and conquering. Put most (75%-80% of your free cash toward your highest rate debt) and the rest (20% - 25% into a cash account that you can use your future emergencies. This way, you’re building a financial life that will support you from every angle.

WHAT’S OUT: Spending That No Longer Serves You

If last year felt like money just slipped through your fingers, this is a place to focus. It’s time to clear away any spending habits or routines that may be holding you back from reaching your bigger financial goals. For example, are you often tempted to swing through a drive-thru on the way home rather than cooking? Maybe you default to adding just one more thing to your online shopping cart so you can qualify for “free” shipping?

We all have spending habits that we fall into out of boredom or routine rather than necessity. Consider this your year to truly evaluate every purchase and make sure it feels “worth it.”

Pro Tip: Do a values audit of last month’s spending. Go through your credit and debit card statements to see where your money went, then ask yourself if you would repeat those charges again.

WHAT’S IN: A Realistic Plan for Saving for Retirement

Do you have an ACTUAL plan for saving for retirement? We’re not talking about only saving money “when you can.” We’re talking about saving consistently, in a dedicated account every month. The good news is that you don’t need a perfect salary or a perfect system to start. You just need a plan that works for where you are right now.

Whether you have access to an employer-sponsored plan or you’re saving on your own, this is the year to get strategic about how you’re building your financial future.

If you have a workplace retirement plan (like a 401(k) or 403(b):

• Try to contribute enough to snag your employer match, if offered. That match is literally free money.
• If you’re already getting the full match, consider increasing your contribution by 1% this year, and every year until you max out. Typically, you won’t feel that missing 1% in your paycheck, but you’ll will definitely feel it when you hit retirement age and see the power of compound interest!

If you don’t have an employer-sponsored plan, don’t worry. You still have powerful tools available, including:

• Traditional IRA: A retirement account where you contribute pre-tax dollars (getting a tax break now), then pay ordinary income taxes later when you take the money out in retirement.
• Roth IRA: A different retirement account where you contribute money on which you’ve already paid taxes. Your money then tax-free and you can withdraw it tax-free in retirement (and pass it along to your heirs tax-free as well.)
• Brokerage Account: A taxable investment account you open yourself that lets you invest for the long term. It gives you total flexibility with how much you put in and when you withdraw.

With every dollar you invest, remember that you’re taking another baby step toward long-term financial security.

WHAT’S OUT: Emergency Fixes That Aren’t Built to Last

Sometimes life puts you in a bind where you have to use what you have — a one-time tax refund, some extra overtime, or a hard-fought savings account to cover a routine bill. These “quick fixes” are incredibly valuable when you need them, but they’re not meant to carry your entire financial picture long-term.

What does this mean for you? Putting long-term stability back into the center of your budget by building (or replenishing) an emergency fund. This is the money that will protect you from relying on credit cards or one-off solutions the next time life throws something unexpected your way. The traditional rule of thumb is to save 3 to 6 months’ worth of essential expenses, but some studies suggest even having 6 weeks’ worth may be enough. Your goal for right now should simply be to start. Even setting aside $50 a month is a great start.

Pro Tip: If your income is irregular or unpredictable (and that uncertainty itself is stressing you out) it may be worth asking if this is the year to look for more stable employment or to take on a side gig that brings in consistent income. The more reliable your paycheck, the less likely you are to fall back on quick fixes just to make ends meet.

WHAT’S IN: A Monthly Budget You Actually Use

You can’t build the best version of your financial life on autopilot. The budget that works is the budget you actually touch. What does that mean IRL? It means you interact with it — not once, not once a quarter — but every month, even if it’s just for five minutes. A budget you “touch” is one you:

• Open regularly (in your spreadsheet, app, or notebook).
• Update with real numbers — Track what you actually spent (not what you hoped to spend).
• Adjust as life changes — When expenses shift, income changes, or goals change.
• Use to guide your decisions — Can you say yes to dinner out, or plan a weekend trip? Your budget will help you decide.

As you build your plan for this year, remember that your budget is a tool, not a punishment. It’s how you make sure the money you work so hard for is working hard for you, too!

Picture Yourself a Year from Now
You’re standing in a life shaped by the choices you made this year. What did you do that moved you forward? Your goals are already whispering to you — the life you want, the stability you deserve, the freedom you’re building toward. And with a little planning and a bit of thoughtfulness each month, there is nothing standing between you and the version of yourself you’re hoping to meet in the next New Year.