Starting the New Year with a pledge to reduce or eliminate debt will always yield positive results.
Riverside, CA (PRWEB) January 15, 2014
A new year typically brings with it a renewed commitment for self-improvement. Some decide to improve their level of physical fitness while others focus on eliminating bad habits such as smoking and drinking. Springboard Nonprofit Consumer Credit Management, Inc. (“Springboard”) believes one of the most important resolutions consumers can make is a commitment to financial fitness. Deciding to take control of one’s financial future is the first step on the road to financial freedom.
“It’s never too late to begin good financial habits,” says Melinda Opperman, Springboard’s senior vice president. “Starting the New Year with a pledge to reduce or eliminate debt will always yield positive results,” says Opperman.
Springboard has been helping people get into better financial shape for 40 years. The agency encourages consumers to make the following moves for a brighter financial future:
1. Review credit reports – Much of a consumer’s financial future depends on the contents of their credit report. Therefore, the first step should be to obtain the report, review it for accuracy and dispute any errors. Since consumers can access their credit report free of charge, there is no reason to neglect this important piece of one’s financial life. Consumers are allowed one free report from each of the three major bureaus once every twelve months. Consumers can get all three at once, which is a good idea if a major purchase is on the horizon, or stagger requests to check for identity theft. Consumers may access their report at http://www.annualcreditreport.com.
2. Reduce debt – If there is a deep financial hole, stop digging. Piling new debt on top of old is a red flag that one is living beyond their means. Lock up the credit cards until they’re paid in full, and meanwhile, reach out for help from a legitimate credit counseling agency sooner rather than later. Delaying only makes the problem worse.
3. Commit to save – Americans are great spenders and lousy savers. Without a well-funded savings account, consumers may find themselves on a very slippery slope, one that becomes treacherous with the next unplanned expense. Put 10 percent of each take-home check into a savings account. Find extra money to dedicate to saving by putting all raises, bonuses, birthday checks, and any other windfall monies into savings. This will create a cushion during most short-term emergencies.
4. Get financially organized – Create a personal financial center where the family’s financial records can be obtained instantly. The center doesn’t have to be a fancy home office. It could be an accordion folder. The point is that important financial papers are readily accessible. Place original documents such as a will or your mortgage in a safe deposit box, and keep a copy at home.
5. Avoid incurring late fees – Pay bills as soon as they arrive. This will prevent the risk of the creditor receiving payment after the due date. Delaying could result in late fees, a ding to one’s credit report and a lower credit score. The risk of delay is simply too great. Consider setting up online bill pay with payments large enough to cover at least the minimum amount due.
6. Avoid paying overdraft fees - A receipt stuffed into a car visor isn’t simply being unorganized. It can cost. Many an account has been overdrawn due to neglecting to notate an ATM withdrawal or debit purchase. Get into the habit of recording each transaction into a check or debit card register on the spot. Also, take the time to do a checkbook balance each week and reconcile bank statements each month.
7. Track all spending for 30 days – Have everyone in the household who spends money participate in this exercise. Write down every cent that is spent, as it’s the small, miscellaneous expenses that often wreck the best of plans. At the end of the month, come together to review the spending. This is the only way to truly know where the family’s hard-earned money is going.
8. Create a realistic spending plan – Once spending has been tracked for 30 days, the next step is to make conscious decisions as to how to allocate the money. Continue tracking with the new plan in place. Keep doing so until the plan fits the family financial goals. Make it too strict, and no one will stay on board. Make it too lenient and financial goals will not be accomplished.
9. Take advantage of free money – Contribute the maximum amount to retirement plans at work, or at the very least, meet the matched amount. Neglecting to contribute is throwing away free money. Also inquire about the availability of Flexible Spending Accounts or Health Savings Accounts. All of the above can lower taxable income.
10. Have an annual insurance check-up – No one wants to be over-insured, nor under-insured resulting in an unpleasant surprise when making a claim. Speak with a reputable agent and confirm exactly what is covered. Inquire about ways to lower premiums, and ask about any discounts for loyalty, good driving and the bundling of multiple polices.
“A new year can mean a new you, at least a new financial you,” said Opperman. “Put one of the above steps in place each month, and at this time next year you’ll see that new financial you. Even better, put one tip in place each week, and you’ll be on your way to financial stability at the end of the first quarter of 2014.”
Consumers can also assess their current financial health by participating in the Sharpen Your Financial Focus program. As part of the program, Springboard is providing consumers with financial reviews, financial self-assessment tools, and educational workshops. Consumers are encouraged to participate in the Sharpen Your Financial Focus program through the following actions:
“Whether a person prefers an online diagnostic tool, an individual financial review, group or an on-line learning session, the important thing is to take the first step. This program has been designed to help individuals and families gain a better understanding of their personal financial situation. This program makes that easy to do,” said Opperman.
About Springboard Nonprofit Consumer Credit Management
SPRINGBOARD® Nonprofit Consumer Credit Management is a 501(c)(3) nonprofit personal financial education and counseling organization founded in 1974. Springboard is a HUD-approved housing counseling agency and a member of the National Foundation for Credit Counseling, a national organization of nonprofit credit counseling agencies, and a member of the Association of Independent Credit Counseling Agencies. The agency offers personal financial education and assistance with credit counseling, housing counseling, debt and money management through educational programs and confidential counseling. Springboard is accredited by the Council on Accreditation, signifying the highest standards for agency governance, fiscal integrity, counselor certification and service delivery policies. The agency provides pre-bankruptcy counseling and debtor education as mandated by the bankruptcy reform law. The agency offers nationwide phone counseling services and has locations in California, Arizona, Nevada, New Mexico, Texas, Massachusetts, South Carolina, Florida and Maryland for in-person counseling sessions. Not all types of counseling are available in-person at all locations, please call for details. For more information on Springboard, call 800-449-9818 or visit their web site at http://www.Springboard.org.
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