Bills.com's 7 Ways to Spruce Up Finances for Spring

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Spring cleaning money management offers a fresh start

For April, National Financial Literacy month, Bills.com offers seven ways for Americans to "spring clean" their personal finance habits.

"Clearly, Americans are working to strengthen their kitchen-table economics," said Ethan Ewing, president of Bills.com. "Fortunately, there are powerful steps individuals can take to build a bright credit and debt outlook."

As of 2008, Americans carried average unsecured debt of about $10,678 per household. Fortunately, in December, the U.S. personal savings rate reached 3.6 percent, its highest level in six years. That brings Americans' personal savings up to half the average rate saved by U.S. households since 1929 after several years of being near zero or at negative levels.

To polish up personal finances, Ewing suggested these steps:

1.    Go on a plastic diet. Commit to living without credit cards for a period, even if only a month. "Imagine that your credit card is another checking account that you must balance monthly, and that overspending will cause you to go into overdraft -- which, after all, is what debt amounts to," Ewing said. Withdraw cash for the week or month, or use a checkbook or debit card to make purchases. Being more conscious of spending will help rein in impulse purchases and reduce overall spending.

2.    Live under budget. Know exactly what you earn each month, and then spend less. "Take responsibility for where your money goes, rather than allowing whims, advertising, habits or peer pressure to influence spending," Ewing suggested. Basic budgeting templates can be found online, such as the free guide Bills.com offers, or in any number of personal finance books.

3.    Commit to savings first. Often, people find saving easier when they take advantage of direct deposit or automatic transfer to a savings account. "Consider savings a 'bill' that must be paid, even if it is as little as $1 per day," Ewing said.

4.    Plan ahead. Look to the future and think about upcoming large expenses, such as tuition, a lump insurance premium, a major car repair or holiday giving. Divide the annual expense by 12 and plan to save 1/12th of the total each month. Some people manage these savings through a financial software program or a ledger; others set up individual savings accounts for each goal. Arrange automatic transfer each month to do the saving for you.

5.    Prepare on-time payments. Pay bills with checks or set up automatic payment plans to eliminate worries about a late or forgotten payment.

6.    Knock down debt. If you cannot pay all of your debts down in a short period of time, then prioritize. Make minimum payments on credit cards with the lowest interest rates, and put all available funds to the card with the highest interest rate. Once that is paid off, put excess cash to the card with the second-highest rate, and so on until you are debt-free.

7.    Be prepared with insurance. In addition to savings, review insurance coverage to protect yourself from eventualities. Look into appropriate coverage, such as health insurance, homeowner's or renter's insurance, car insurance, disability insurance, life insurance and long-term care insurance, as appropriate. Review your annually, or request a coverage review with an insurance agent, to ensure you have the proper coverage.

"The good news about our nation's current economic challenges is that they have inspired many Americans to spruce up their personal finances," said Ewing. "If you would like to join them, there is no time like spring to make a fresh start."

About Bills.com (http://www.bills.com)
Based in San Mateo, Calif., Bills.com is a free one-stop 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. As the online portal to Freedom Financial Network, LLC, the company has served more than 50,000 customers nationwide since 2002 while managing more than $1 billion in consumer debt. Its RSS feed is available at http://www.bills.com/news_releases/.

Bills.com holds the No. 257 spot on the Inc. 500 list for 2008, and the No. 3 spot on Entrepreneur Magazine's Hot 100 list of the fastest-growing U.S. companies. Company co-founders and co-CEOs Andrew Housser and Brad Stroh were named to the Silicon Valley/San Jose Business Journal's "40 Under 40" list in 2008, and were recipients of the Northern California Ernst & Young 2008 Entrepreneur of the Year Award.

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Aimee Bennett

Ethan Ewing
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