New Year's Resolutions for Consumers Who Want to Build Their Wealth
Dallas Fed’s financial education tool Building Wealth offers practical guidance to help secure a financial future
Jo-Carolyn Goode | 1/12/2015, 11:52 a.m.
DALLAS—Building Wealth: A Beginner’s Guide to Securing Your Financial Future—a free Federal Reserve Bank of Dallas resource—features helpful guidance for consumers who have made a New Year’s resolution to better manage their finances in 2015.
“Building Wealth is a valuable tool that can help individuals and families develop a plan to secure their financial futures,” said Dallas Fed president and CEO Richard W. Fisher. “Regardless of a person’s income or educational level, it’s important that everyone has a solid plan for their personal finances.”
Here are three New Year’s resolutions from Building Wealth that individuals and families can use to achieve their financial goals:
1. Develop a Budget and Live by It
Developing a budget helps people understand where their money goes, avoid overspending and find money for saving and investing, says Fisher.
“Tracking day-to-day spending is a crucial first step to developing a monthly budget,” Fisher said.
2. Make Sure You’re Ready to Take on a Credit Obligation
Before using a credit card or a loan, it’s wise to have a good financial foundation, including emergency savings, financial records and goals, and insurance.
“If you don’t have a budget or spending plan, you’re not ready to take on debt,” Fisher said. “Consumers with good credit history receive lower interest rates, which will save them money that can be used elsewhere, like for paying down debt.”
3. Know the Cost of Credit
Consumers should be familiar with everything about a loan or credit card, including interest rates, annual percentage rates (APR), finance charges, and fees and penalties for late payment or early repayment.
“Building Wealth uses the example of two spenders purchasing a new TV to demonstrate how wise decisions can save you money,” Fisher said. “One buyer purchased the TV with money from a savings account; the other spender financed it with a store credit card. The consumer using the credit card spends $700 more than the spender who used the savings account.”
The online guide, featuring characters who encounter different financial situations, is part of a Building Wealth suite that includes updated resources, detailed graphics and charts, a tablet-optimized version and a printed guide, also available in Spanish.
For more information, visit t these tips and others in Building Wealth, visit the new interactive online guide at www.buildingwealth.org