For many Americans, reaching and maintaining financial stability is a goal that tops their checklists.
However, the strategies necessary for achieving that goal can quickly fall by the wayside.
Consider these tips from Bank of America Credit Cards Executive Jason Gaughan that you can put in place to help keep your finances in check throughout the year.
Make Financial Goals More Attainable
The key to achieving financial goals is to make them measurable. Try to focus on achievable outcomes that slowly push you in the right direction financially. For example, if you are planning to make a large purchase, give yourself a specific, short-term goal like saving $50 from a paycheck so you can effectively measure your progress and build toward your purchase over time.
Redeeming your credit card rewards wisely can also help you more seamlessly reach your financial goals. Some cards allow you to redeem cash rewards directly into a checking or savings account or to apply to your credit card balance. In some cases, rewards can also be applied into longer-term investments like 529 accounts for college savings or a retirement fund, letting your everyday spending help fuel your future goals.
“Earning cash back on everyday purchases can provide extra funds to invest, splurge on a family vacation or put a down payment on a new car,” Gaughan said. “Whatever your financial goals are, a rewards card can help you get closer to achieving them.”
Reduce the Number of Credit Cards in Your Wallet
A Bank of America survey found 52% of Americans weigh down their wallets with multiple cards to earn rewards across different categories. By choosing a flexible credit card that allows you to earn benefits across various categories, you can consolidate and eliminate the need to juggle a variety of rewards cards.
One flexible card option is the Bank of America Cash Rewards credit card, which allows you to choose from one of six categories – gas, online shopping, dining, travel, drug stores or home improvement – to earn 3% cash back on purchases each month along with 2% cash back at grocery stores and wholesale clubs, up to $2,500 each quarter. Cardholders also earn 1% cash back on all other purchases. Cards such as this reward all your purchases, especially those in the places where you spend most frequently so you can maximize your cash back.
Cut Unnecessary Spending and Tackle Debts
If you’re dreaming of financial freedom, a budget is one of the first steps toward getting there. Start by reviewing bank and credit card statements from at least the past three months to gain a better understanding of your spending habits and identify areas you could improve. While cutting back on non-essentials is typically a good place to start, this is also an opportunity to identify areas you can get better deals by switching providers for things like car or homeowner’s insurance as well as your cellphone, internet and other home services.
Once you’ve addressed your expenses, consider tackling your debts. To determine which debts need to be prioritized, look at the interest rates and principal costs of each and focus on paying off debts with higher interest rates first. Reducing your debt should take priority over most savings goals.
Discover New Ways to be Rewarded
You may be eligible to enroll in a banking rewards program like Bank of America Preferred Rewards, which gives members access to a variety of everyday banking benefits including credit card rewards bonuses on eligible cards from 25-75%, home and auto loan discounts, free stock trades, ATM fee waivers and more.
Layering your banking rewards program together with airline, hotel, credit card, dining and shopping rewards programs can help boost your financial rewards earnings to the highest level.
Use Digital Banking Tools to Gain Full Visibility Into Your Finances
When using a combination of multiple rewards and savings strategies, it can be hard to keep track of where and how much you’re earning and saving at a given time.
Your bank may offer digital tools that provide assistance and resources to simplify your banking experience. For example, some digital dashboards allow cardholders to track their rewards earnings and redemptions, and discover additional benefits. Those using their bank’s application on their computer or phone can typically manage their rewards, deals and benefits across multiple rewards programs.
Keep Tabs on Your Credit Reports and Scores
A numeric representation of your credit, your credit score signifies to lenders what kind of borrower you are. Because it influences everything from mortgage and auto loan rates to credit card approvals, keeping an eye on where you stand can be important in achieving your financial goals. It’s smart to periodically check your credit score to make sure everything is accurate and know where you stand. You can check your score through the major credit bureaus, and some credit card issuers even allow you to view your score for free through online or mobile banking.
The key to keeping your finances fresh is to create a simple strategy that allows you to push toward your financial goals all year long. By consolidating your wallet, creating realistic goals and budgeting, you can set yourself up for financial success.
Earn Rewards Where You Spend Most
According to the spending analysis of more than 50 million Bank of America credit and debit cardholders, the average cardholder spent $3,174 on groceries, $2,430 on dining, $2,319 on travel and $1,627 on gas last year.
“Regardless of whether your spending priorities change frequently or remain steady, you should consider a flexible card that allows you to earn cash back across multiple categories that align with your spending patterns,” Gaughan said.