This New Year's, Resolve What Not to do with Money, Housser Suggests

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Bills.com co-CEO offers Top 10 financial mistakes to avoid in 2008.

This year, instead of making a long list of resolutions about what to improve, Bills.com co-founder and co-CEO Andrew Housser suggests Americans take a look at his list of the biggest mistakes they might be making by their money -- and resolve to set themselves straight.

Housser's company provides a free online consumer portal, Bills.com (http://www.bills.com). With information on mortgages, loans, credit cards, insurance, bill payment and financial planning, Bills.com provides a solid framework for people to turn around any of the following mistakes:

1. Living beyond their means. Perhaps the biggest classic money mistake, and one made by millions of Americans. "Simply stated, spend less than you earn and save whatever you can," Housser said. Create a new budget for the new year and start fresh. Bills.com offers a free budget guide at http://www.bills.com/guide/.

2. Not planning for taxes. Those who owe quarterly estimated taxes should resolve to make this the year they pay enough -- and save for any contingency. For those whose employer withholds taxes, check withholdings to be sure they are adequate.

3. Not maxing out retirement savings. Employees who do not contribute to their available retirement savings vehicles -- especially if employers match those contributions -- are throwing money away, Housser said. If you company offers a 401(k) program and you are not participating, you are stealing from yourself. (Fix this problem - fast!)

4. Borrowing from retirement savings. Except in the most dire emergency, it is unwise to borrow from retirement accounts. "It amounts to stealing from your future income," Housser warned.

5. Risking the home to pay off current debts. Refinancing a home or taking out a line of credit to pay off credit cards or loans is a dangerous gamble. Instead, Housser suggests, keep credit and loan debt low, make regular payments, and if necessary, work out a payment play with the lender. "If your debt situation is overwhelming, that's the worst time to assign debt to your home," he added. "Instead, seek out reputable debt resolution assistance as soon as possible and develop a plan." Check Bills.com's parent company, Freedom Financial Network, at http://freedomfinancialnetwork.com/ , for help.

6. Going without health insurance. Health insurance costs keep climbing, but that's no reason not to invest in coverage, Housser said. Otherwise, one accident or unexpected illness could cost decades' worth of financial well-being.

7. Not investing in life insurance. Anyone who has others relying on their income must protect their well-being with life insurance. Plans are surprisingly affordable, especially if the buyer makes the purchase at as young an age as possible, Housser said.

8. Juggling credit card debt. Credit card debt is one of the biggest enemies of sound financial health. Treat this debt as a cancer and get aggressive to kill it. Wth credit card offers flooding mailboxes, it's easy to get into too much debt by transferring balances, charging more, making minimum payments and racking up late fees. "One word: STOP," Housser said. "Cut up the cards or freeze them in a bowl of water if necessary to eliminate impulse spending. Start paying as much as possible on the balances, and don't quit until they are gone."

9. Not paying on time or skipping payments. Missing payments or paying late is costly. At best, it shatters credit and runs up late fees. At worst, interest rates on other debt will skyrocket to 30 percent or more annually (thanks to a "penalty payment" clause). Wages can be garnished to pay parental support and taxes.

10. Misjudging how much money should earn. Check the interest rates on accounts. Many credit unions are paying interest rates less than 1 percent annually. In contrast, online banks are offering 4 percent to 5 percent. On a $1,000 balance, the earnings differ by $35 per year. With a $10,000 balance, the difference is $350 per year. "Put money where it will pay off," Housser said. "And by the same token, don't take inappropriate financial risks in hopes of a quick return." Consult a financial advisor for more information on a specific plan.

"If any of these mistakes ring true, do yourself a favor and correct the mistake before it starts costing you," Housser urged. "After all, a new year provides a fresh start -- for you and your money."

Based in San Mateo, Calif., Bills.com is a free one-stop online portal where consumers can educate themselves about complex personal finance issues and comparison shop for products and services including credit cards, debt relief assistance, insurance, mortgages and other loans. The company blogs about consumer finance issues at http://www.bills.com/blog. Since 2002, Bills.com has served more than 30,000 customers nationwide while managing more than $500 million in consumer debt. Bills.com is a division of Freedom Financial Network, LLC, whose co-founders and CEOs, Andrew Housser and Brad Stroh, have been named Northern California finalists in Ernst & Young's Entrepreneur of the Year Awards.

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