Latest / What’s Up, Wake / Kickstart Your 2026 Financial Goals with Expert Tips from Joe Mecca
Transcript
- 44 What's Up Wake - Coastal === This month we've been talking about New Year's resolutions for 2026, along the lines of health, fitness, and traveling. Now it's time to talk about how to pay for those goals. I've brought in someone who knows how to keep your financial wins from disappearing faster than your holiday bonus. [00:01:17] Melissa: Today I'm joined by someone who will talk about smarter saving habits. Intentional spending and how to make 2026 the year your wallet breathes a sigh of relief. Here with advice you can take to the bank is Joe Mecca from Coastal Federal Credit Union. Welcome, Joe. [00:01:34] Joe Mecca: Thanks for having me. [00:01:35] Melissa: I'm excited to talk to you about a subject that doesn't seem very exciting, but we're gonna try to make it, um, a little exciting. First, can you tell us a little bit about yourself? [00:01:46] Joe Mecca: Well, um, first and foremost, big money nerd. So I've been working in coastal Credit Union for just over 20 years and have just learned a ton about personal finance mm-hmm. And things that I can apply in my own life and love sharing that with other people. [00:02:00] Melissa: Great. That's exactly what we're gonna do today. You have come with kind of a top five list of tips for. Really how to set our, our new year off to a good start in, in terms of our finances. So let's start with tip number one, which is have a budget. [00:02:20] Joe Mecca: And this is critical. This is absolutely key to everything. You want to really understand the importance of where your money's coming from, where your money's going. The start of the year is a great time to do that. Take a look at all of your expenses. Um, you know, where you have spent money historically, so maybe take a look back at the last 12 months and then really plan ahead to where you're gonna spend money over the, the course of the next year, even if you're maintaining a budget currently. Now's a great time to revisit that things change. You know, taxes change at the beginning of every year, so maybe your take home pay is slightly different than it was before. Could be a little less, could be a little bit more. Um, your contributions to your retirement accounts can change at the beginning of the year. So beginning of the year is a great time to really kind of take a look at everything that you're spending money on. [00:03:06] Melissa: And with inflation prices have been going up, so you kind of need to adjust that in your budget. Absolutely. Yeah, absolutely. [00:03:12] Joe Mecca: Prices change, groceries continue to go up. Mm-hmm. Um, you know. Auto expenses continue to go up, so being able to just take note of everything that you're doing and adjusting for that for the year ahead is a great time to do that. [00:03:27] Melissa: What do you suggest for people, because I know there's a lot of apps and stuff out there that kind of make budgeting easier. Is there a certain app or a way to set the budget that you suggest to people? [00:03:40] Joe Mecca: So I'm actually somewhat partial to, to our own products. So our, we just launched a new digital banking. Platform at Coastal and within our digital banking we've got a number of budgeting tools built in. So there is the, a budgeting module that will allow you to really set your spending goals and your income numbers for for each month and help you forecast out where all that money is going. There is a spend analysis tool, so it'll actually show you where by category all of your money is being spent. And it's a look back, but it's useful information to have as you start to plan ahead. Um, we also have a cashflow tool, which shows you your trend over the last year of where months that you've spent more or months that you've saved more, and really helps you kind of gauge where all your money, not where your money is going, but how much of your money is flowing in one direction or another. And then there's, there's just the overall budgeting tool that we use. Um, there's online tools that you can use. There's a lot of 'em. Um, yeah, I wouldn't even name 'em all. I'm somewhat partial to even just sitting down with an Excel spreadsheet and plugging in the information there. Yeah. Old school. Yeah. And yeah, it's, for me it's, you know, it is just a way for me to get the whole big picture. I can see all my categories month over month. Um, I can really track where everything is, and I will sit down every month and just put everything into a spreadsheet and do it that way. But regardless of how it works for people, you know, you can do it in a notebook. Write it down. Yeah. Pen and paper. Um, the important thing is if you're [00:05:13] Melissa: good at keeping up with, you know, writing everything down that you're, that's also coming out that you're spending, and that's to see if you're balancing your budget. [00:05:20] Joe Mecca: That's a big challenge for people, but that's often the most eye-opening thing. You know, at the end of the day, budgeting is just, oh, sure. Yeah. The end of the day budgeting is just numbers, right? Mm-hmm. It's, there's not much to it. It's the emotional side of it. All of those numbers are decisions you made. Whether, you know it's a decision in the past or it's a decision looking forward, [00:05:38] Melissa: we don't like to talk about that, Joe. [00:05:39] Joe Mecca: I know [00:05:40] Melissa: my husband will send me, I know it's hard part. Yeah, he'll, he's the big budgeter in our family and he, and he'll send me screenshots of things and I'm like. Do we need to talk about that right now? Can we kick the can down the road? And no, he does not like to kick the can down the road, but he definitely finds budgets to be very important. And, and I'll mention Dave Ramsey just because that's, that's a program that I listen to on the radio at night. If I'm in the car at night, and I know they use something called Every Dollar. I think it's called the every dollar app or something. And that's also a budget that, um, you, you have to be diligent about putting in exactly what you spend. Um, which I feel like I'm not gonna be very good at, but I can try. [00:06:25] Joe Mecca: And there's, there's a bunch of different tools. Like that is one of mm-hmm. That is one of them. There's, you need a budget is another one. Yeah. Um, what I like about our tools, you can import. Your other accounts from other institutions. So it can give you Oh, that's good. Full look. Okay. And you can link, yeah, you can link to your other accounts so you, it can get a full picture of all of your spending and all of your budgeting, not just what you have with Coastal. So that's well I really like to see that. Yeah. Um, and be able to get that big picture. [00:06:50] Melissa: And that's convenient too, that it's automatically, um, like it. I'm assuming this is how it would work. If, you know, you go to Starbucks, you get a coffee and you have to apply it to something within your budget because it's showing up in the account, so they want you to put it somewhere. Right. Is that kind of how it works? It'll, [00:07:09] Joe Mecca: it'll categorize it, yeah. Okay. So it can go, it usually based off of, especially if you're doing it by a credit card or a debit card. Mm-hmm. It's gonna categorize it by what the merchant codes are. So, okay. Every, every place that accepts debit or credit cards has a code that they send back to the processors, visa or MasterCard, and that tells them what kind of business they are. [00:07:28] Melissa: Okay. So [00:07:28] Joe Mecca: it can read that information and categorize it for you. [00:07:30] Melissa: . You know, we're in 20, 26 now, everything is, is so much smarter than I am, so anything that would. Make that process easier and just automatically do it for me would be very helpful. [00:07:41] Joe Mecca: And that's actually one of the points I love about budgeting is automating things. Yeah. I don't think I talk about that enough. And that's one of my favorite things is, you know, direct deposit is one way to do it. You put the money where you want it to go, but also set up automatic transfers, set up automatic payments mm-hmm. To different, your different billers. Um, and the more you can kind of set it, not really forget it, but set it and make sure it's happening every month for you. The less you have to manage. And then budgeting becomes a lot easier because it's it's repeatable and it's predictable. [00:08:10] Melissa: Yeah, and, and they say what? It takes two weeks to form a habit, so stick to this for a couple weeks and then hopefully you'll be so used to it that it's just second nature. All right. Tip number two is to start or maintain your emergency fund. I'd love for you to talk to us about what, what constitutes an emergency fund, what should it be used for, and why is having one important [00:08:36] Joe Mecca: So at it's, at its core, an emergency emergency fund is literally that money you're setting aside for the unknown. The unpredictable things are going to happen. Stuff breaks. Breaks, so like car [00:08:46] Melissa: breaks down [00:08:47] Joe Mecca: car, that's a, that's a great one. Cars need repairs, stuff breaks. People get sick, people get injured, pets get sick. True. So there are things that will happen in your life that it's tough to budget for, but it's nice to have that money set aside. Um, that's money you're gonna put aside into a separate savings account. You know, you're not looking to make a high return on that. You're not looking to invest it. That's money that you want set aside for if and when something happens and you need to, you need to pay for that. You don't wanna take that out of your, your monthly budget, right? Your monthly spending, your monthly bills. You wanna have something set aside for, for those emergencies. Um, and there's different ways to look at it. At the core, you know, they say people should have $400 or a thousand dollars set aside. Those are kind of your typical emergencies that you might run into. Mm-hmm. Fall in that range. But looking further ahead, you know. Conventional wisdom or, or advice that I've heard and advice that I've followed is three months or six months of your expenses. And that could be at, at its core, could just be your cover. What, what you need to cover your bills to, all the way up to like what's your full monthly spend. Set that aside. , [00:10:02] Melissa: because if you, if you have an accident or something catastrophic happens, you need to be able to still pay your bills. So we're not just talking about if you're heating and air conditioning goes out and having a plan for that, it's really what if something truly bad happens and you need to be able to. To pay your bills. [00:10:18] Joe Mecca: True. Yeah. You, it could be, and it could be you're unable to work. It could be you're out of work. Mm-hmm. Um, if you're a Yeah, you lose [00:10:25] Melissa: your job. That's a good point too. And [00:10:26] Joe Mecca: it, and it could be one or both people in a household. Um, so there's a lot of different, there's a lot of different things that could constitute an emergency and a lot of different ways that you're gonna wanna be able to cover it. But at, at the basic is you're gonna wanna set aside that money and keep it separate from everything else. [00:10:43] Melissa: So how do we include this part in our budgeting? Should, should there be a certain percentage of our paychecks, um, each month that maybe we should have a budget line item that goes straight to the emer emergency fund. Do you think [00:10:58] Joe Mecca: if somebody doesn't have an emergency fund, I would tell them that's their, that's their top priority Yeah. Is getting that established. Mm-hmm. Um, set aside. Set aside something from every paycheck until they hit that $400 or they've hit that a thousand dollars. Then adjusting from there and saying, okay, well maybe you're gonna set aside a hundred dollars a paycheck until you get up to three months, three months of expenses. Mm-hmm. Um, or, or whatever amount kind of fits into your plan. When you're budgeting, you need to look at, there's a concept called pay yourself first. And that's funding your retirement, paying down your debt, but also establishing that emergency fund. And when you're, when you're creating your budget, that's a, a bucket of spend that you need to look at before you look at everything else. So it's, you establish those things, then you budget for your bills, and then you have your spending money set aside. So that would, your emergency fund would fall into that first bucket. [00:11:52] Melissa: So speaking of paying yourself first and retirement plans, that's tip number three. Reassess your retirement plans and goals. So, why is January a good time to start rethinking about retirement plans? [00:12:07] Joe Mecca: One of the biggest reasons is contribution limits change in January. [00:12:11] Melissa: Oh, I didn't think about that. [00:12:12] Joe Mecca: Yeah. Every year, you know, you hit it, you hit the start of a new year. The IRS puts out new guidelines for what the contribution limits are. So if, if you're somebody who is. Contributing a lot towards your retirement. This is the time of year that you would want to adjust that. Um, or if you've hit a milestone, so like, I'm gonna turn 50 this year. I can contribute more to my 401k and I could contribute more to my IRA. So I'm gonna wanna be mindful of that, that January is very time to realize that. I didn't realize that based [00:12:38] Melissa: on age you could start contributing more. Yeah, there are makes sense, but I didn't realize that [00:12:42] Joe Mecca: there are catch up contributions that you're able to do when you hit certain ages. Um, and it varies by the type of accounts that, that there are, but fifties, one of those milestone years where you can start to contribute a little bit more to those accounts. , [00:12:53] Joe Mecca: I always recommend to people that if they're contributing to their employer's 401k plan, um, you know, they want to, at the minimum. Take advantage of whatever matching program that their employer offers. So if their employer matches 5% or 6%, that's, that's what you wanna start at. You wanna be doing at least five or 6% because that's [00:13:13] Melissa: tax free money right out of your paycheck. [00:13:15] Joe Mecca: And, and typically you're not gonna make that up somewhere else. Mm-hmm. So if, if you put in 5% and they put in 5%, now you've put aside 10% of your income. And it's tax advantaged, but also that extra 5% that they've put in there is, you know, it's like you've doubled your money that year. [00:14:26] Melissa: So speak to, say, a a 22-year-old fresh out of college, should they start investing in a retirement plan that young? I mean, I would say the answer is yes. [00:14:38] Joe Mecca: I would always say if they're working, period. So whether you're fresh outta college in a full-time job, or you're working part-time while you're going to school and that employer has a plan available to you, always contribute to it because you can't make up time. [00:14:52] Melissa: Yeah. [00:14:53] Joe Mecca: You know, and, and in investing, especially in a tax advantaged account, like a 401k or an IRA or even a health savings account. The time that you put into it is the advantage of it, because that money compounds over time. And to not be paying taxes on that or to, um, just not being touch, not touching that money for 30, 40 years, it just compounds over time. And, and that's where you really come out ahead in when you're getting to retirement age. [00:15:27] Melissa: Even though I, I, I know, and I've, I've been there. It feels like you really need that money. Um, but now that I'm getting older, I am, I look back and I'm, I'm so blessed that I married somebody that thought about those things when we were in our younger twenties, because now we can see the, the, the benefits, um, because it really does snowball over time. And you look at the accounts and go, wow, I'm, I'm glad we did that at, you know, starting a young age. Now let's talk about the people that are in their fifties or sixties and perhaps not started a retirement fund. Is it too late to start a retirement fund, or do you think. These people should possibly pivot in another direction and start investing in another way. I [00:16:16] Joe Mecca: don't think it's ever too late to start to contribute to a retirement fund. If you're talking about somebody who's closer to retirement age, though they may have different needs, different goals. Mm-hmm. Um, and different abilities to contribute. That's, and, and this is part where I'm gonna throw in my disclaimer that I'm not a financial advisor. Yeah. Oh, yes. [00:16:34] Melissa: Very good point folks. He is, he is not an advisor. [00:16:38] Joe Mecca: So everyone's goals, he's just a smart banker. These situations differ. Yeah, your goals, your needs, your situations differ. I do recommend always talking to somebody who is a certified financial advisor. Um, specifics, especially for something like this, specifically Becausecause, you want [00:16:52] Melissa: to be very smart and intentional. If you're, you know, at the point that you're thinking, oh no, am I too late? [00:17:00] Joe Mecca: Yeah. But that's, that's where I'll always turn to our own services at Coastal and say we've got Coastal Wealth Management, we've got a team of financial advisors who can sit down with somebody and work with them individually and really plan out, you know, not just getting to retirement, but beyond retirement. Um, we get into estate planning and wills and trusts, and those sound like, yeah. Those sound like terms for people who've got, you know, tens of millions of dollars. But it's really for anybody. Yeah, because you're planning, you're planning the rest of your future regardless of what you know, what resources you have or what age you're at. So I always recommend sitting down and talking to somebody to really look at the specifics of their plan, especially if they're getting closer to retirement and haven't had a plan. The whole way. Um, but the good thing is if you've got a l you know, a young enough audience and people who you talked about, the people who are fresh outta college, we've talked about people who are near in retirement, but the people in between getting there and, and establishing a good habit to plan for your retirement is something that will help them come out ahead in the end. So we talked about, you know, starting with. Contributing your to your employer's match amount. But then every year as you hit, you know, a new year, you get a raise, you maybe get a new job, a new promotion, increasing that year over year. So if you can add another 1%, another 2%, eventually you get to the point where maybe you are hitting those maximum contributions and. It's become a behavior that is repeatable. Um, you don't really think about it because you've automated the process. And as you go through your career, that really starts to accumulate and is there for you, for your future. [00:18:36] Melissa: Okay, now let's start talking about getting out of debt. Tip number four is implement a plan to get out of debt. And January is a great time to create a debt plan, especially after all the shopping at Christmas. What are some helpful tips to help kick off a debt reduction plan? [00:18:56] Joe Mecca: And this is probably a category that touches the biggest group of people. [00:19:00] Melissa: Yeah. [00:19:01] Joe Mecca: Um, you talked, you know, you and you mentioned some of the types of debt that are out there. So this is a topic that's probably gonna reach the biggest amount of people. 'cause there are so many different types of debt out there. There's consumer debt, there's credit cards, there's auto loans. You know, people have mortgages. They may have home equity loans, they may have different types of debt. Yes. Student loans. That's big. Yeah. Student loans. Loans are a big, a big one for, for a lot of people. And it seems now, later and later into life. Um, but you know, we go back to that concept of paying yourself first. Planning for your retirement, paying down your debt is a big chunk of that. Um, especially, you know, if you're talking about consumer loans that, you know, tend to be a little bit smaller dollar amounts, but maybe a bigger chunk of that monthly, that monthly spend making a plan to reduce your balances and ideally get to the place where, like if you're talking about a credit card, ideally get to a place where you use your card and you pay it off in full every month. Um, so when you're doing your budget. You're gonna have to look at those dollar amounts, look at your balances, and really plan a way to get yourself down to a smaller and smaller balance over time. , Auto loans are usually a fixed term. Home equity loans, usually a fixed term. Your mortgage, that's usually a fixed amount. You may set a goal to pay those off sooner, and by doing that you have to look at, okay, what's my monthly payment and can I pay more toward that every month? Or can I set aside more to make a larger lump sum payment at some point? That works into your budget. You have to figure out where, you know, where's my priority? What do I want this money to do for me in the future, in the, in the immediate term? And then where can I plug in a little bit of extra money to make that happen and focus on one. You know, people usually have a lot of, a lot of different types of debt. Focus on one at a time. Um, I think there, you mentioned Dave Ramsey, so he's got the, the, that snowball. Yes, exactly. Um, where you, where [00:20:56] Melissa: he, he does, that's the paying the. Smallest amount of debt first. Right. [00:21:03] Joe Mecca: That's, that's right. 'cause [00:21:04] Melissa: he's saying it's a mental thing. Once you see that, that you can check that off your list, mentally you, it makes, you wanna keep going. [00:21:12] Joe Mecca: It does. And I, and I actually, that's the, that's the plan that I followed mm-hmm. When I was trying to pay down debt is I knocked off the smallest balance first and then that gives you a little bit more cushion. Not just in your monthly budget, but then a little bit more to put towards that next amount. You knock, got the next one, now you've got even more to put towards the next amount. And it just, it, it snowballs, literally snowballs from there. Mm-hmm. Um, the other way to look at it, some people like to follow a plan of paying down the highest cost debt first. So you look at the debt that has the largest interest amount or the highest interest amount, typically that's gonna be a credit card. Um, so actually when you put those two concepts together, it usually involves. Tackling your credit card debt first. Okay. 'cause credit card debt tends to be the smallest debt that people have. Yeah. 'cause largest [00:21:58] Melissa: debt you would think would be mortgage, maybe student loans if you have a lot of student loans. But, so yeah. I would think credit card might be the smallest. Yeah. [00:22:06] Joe Mecca: So for some people it may be in the middle where your auto loan is, is the smallest amount, and, but that's typically a lower, a lower interest rate. Mm-hmm. Um, but either approach. Is gonna work for people. They just need to look at, you know, what's your priority? What mentally is going to work best for you? Do you want to, you know, knock out the dollar amounts that you're paying toward interest so that more of your money is going to pay down debt? Or do you just want to knock off the smallest payment or the smallest balances so that you have more to put toward payments on other, other types of debt? [00:22:36] Melissa: And then thinking about how, you know, if you're, if you're paying a credit card debt and you're paying the minimum balance. You're really just paying the interest because it, it seems like you're never getting to that principle that you're, that you're bringing down your, your loan amount. Um, so if you pay more than what is o owed? It's reaching above that interest. Right. Am I kind of to, so if you do [00:23:01] Joe Mecca: the minimum payment, trying to this [00:23:02] Melissa: down a little bit. [00:23:03] Joe Mecca: Well, if you do the minimum payment, you, you're not Yeah. You're not gonna pay it down as fast. Mm-hmm. Um, you are paying a little bit more than the interest, but. A big chunk of that is, is the interest. Yeah. So I'm actually, especially [00:23:15] Melissa: with the high interest credit card, [00:23:17] Joe Mecca: typically. Yeah. And then on every credit card statement there is, there is information that's required by law to be there. And one of those pieces of information is how long it will take you to pay down your current balance. If you only make the minimum payments. And it's, I'm [00:23:33] Melissa: sure that's a wake up call. It's, [00:23:35] Joe Mecca: I mean, it could be decades. It could be decades. Mm-hmm. So, you know, the best practice with credit cards is to use them to make purchases and then pay, pay the balance in full at the end of the month. If you need to carry a balance, you don't wanna carry it for an extended period of time. [00:23:50] Melissa: Yeah, definitely. Okay, our final tip, and this is finally a fun one. Thank you for giving us something fun. Have a plan to reward yourself for reaching your financial goals for the year. So. What I'm wondering is reaching your financial goals, does that mean that we have to wait for, for something fun, for once you pay off the debt and you do everything on this list? Or can we still budget somewhere to add a little fun vacation or, you know, a spa trip? [00:24:24] Joe Mecca: So that's one where you, if you've started at step one and you've created your budget. That could be one of your line items. Okay. Is, you know, what's your fun budget? What's your vacation budget? Call it what you will. [00:24:35] Melissa: This is when Dave Ramsey might slap you because I don't think he would agree. I think Dave says, um, no fun at all until all your debt is paid off. And I just feel like that's, that's the one thing that he says to me, that sounds great on paper, but when you don't give yourself, um, little treats, little nuggets here and there. I feel like you would backslide. So your point is. As long as it's in the budget and you can afford it out of your paycheck and it, and it's in the budget, then go for it. [00:25:09] Joe Mecca: I, I'm gonna, yeah, I'm gonna disagree with Dave on that. You, you need to have a little bit of balance in your life. Yeah. And that can, that can vary. You could scale that up to some people. If you're really focused on trying to pay down debt or you're really focused on trying to save for your future, establish your emergency fund. That fund might be mean going to a movie or going bowling. But you've set aside the money to, so it could be a little, little thing. He set aside the money to do that. Yeah. It could be, you know, it could be going and playing mini golf with the kids, or it could scale up to, you know, a vacation. It doesn't need to be a two week international trip. Maybe you do a weekend in the mountains or at the beach. Yeah. So all of its scales, I think. I think if you've got that carved out in your budget though, and you've made a plan for it, it doesn't become debt, it doesn't become a hardship. It doesn't become a strain. You just plan for it and then you stick within the budget for that particular thing. [00:26:04] Melissa: So do you think that in terms of the budget, this should be the last thing you add to the budget? Is the little, the little fun category? [00:26:12] Joe Mecca: I would make it last definitely last. Yeah. [00:26:14] Melissa: It sounds like it should be, but I, I do say it definitely should be in there somewhere. [00:26:18] Joe Mecca: It, I think it absolutely needs to be in there. What [00:26:20] Melissa: is life if you're not having something fun to look forward to? [00:26:24] Joe Mecca: Absolutely. And, and. You know, there's, there's a lot of ways to budget for that. [00:26:28] Melissa: Good point. Okay. That's a wrap on our New Year's Money makeover. Thank you, Joe, for helping us make sense of this year's financial resolutions. I appreciate it. [00:26:39] Joe Mecca: I love the puns. I love the puns. [00:26:41] Melissa: You've come to the right place then. Thank you. [00:26:44] Joe Mecca: Thanks for having me. [00:26:45] Melissa: All right. Perfect.