Fairfax, VA (PRWEB) January 15, 2015 -- A new year brings with it resolutions to make changes for the better. Often among those resolutions is the desire to get out of debt.
“January brings a kind of ‘jump’ to the number of people our agencies see. This is often due to overspending during the holiday season by consumers who might not have planned for their increased spending,” said Kevin Weeks, president, Association of Independent Consumer Credit Counseling Agencies. “Then comes January and the bills and the question becomes, ‘What now?’ for those consumers.”
For consumers who have made the resolution to become debt free in 2015, AICCCA would like to share 10 things their counselors know about consumers with problem debt:
1. No realistic financial goals. Where do you see yourself in one year, in five years and down the road with regards to your finances? Be honest with yourself, but set some goals and write them down now.
2. No clear understanding of the big picture. Do you know exactly who and how much you owe? A good place to start is to look at your credit reports. You can get a free copy at annualcreditreport.com once each year.
3. No system for paying bills. On-time payments are one of the top factors that make up your credit score. Come up with a system that works for you so that you never make a late payment again.
4. No spending plan. A written budget of some type is crucial. Write down your net monthly income and your monthly expenses. If your expenses exceed your income, find places to cut spending or ways to increase income.
5. No money left over. This is directly related to the spending plan. Just breaking even every month will likely not get you to your goals.
6. Using credit to extend income. Again, related to the spending plan, this is a red flag for future problem debt.
7. No idea where the money goes. A great exercise is to write down every penny spent for at least a month. This enables you to find the holes in your budget and stop them.
8. Being caught off guard by periodic expenses. These are the types of expenses that often get put on a credit card. Determine costs for period expenses like auto and home maintenance on an annual basis, divide by 12, put away that amount each month and you will always have money for these expenses.
9. No emergency savings. Separate from saving for periodic expenses, emergency savings are for life events like unexpected repairs or travel, illness or job loss. An amount equal to three to six months of living expenses is the goal. While that may seem insurmountable, start with saving a small amount each month that actually stays in the account and see how quickly it adds up.
10. Pay yourself first. When you set up your budget, be sure that savings for periodic expenses and emergencies are a line item and consider those a bill to be paid.
AICCCA members counsel approximately 2 million consumers each year and 10 million more could benefit from a free financial evaluation. If you need help with your financial situation, visit aiccca.org or call 866-703-8787.
AICCCA: Founded in 1993, Association of Independent Consumer Credit Counseling Agencies is a national membership organization established to promote quality and professional delivery of credit counseling services. AICCCA and its members are focused on financial education, efficient processes and advanced technology to best serve clients and creditors. AICCCA members are independent nonprofit agencies that advocate for debtors, annually counsel millions of consumers nationwide and provide debt management services to consumers with excessive unsecured debt. To contact an AICCCA member agency call (866) 703-TRUSTAICCCA (866-703-8787) or visit http://www.aiccca.org.
Shari Bedker, Association of Independent Consumer Credit Counseling Agencies, http://www.aiccca.org, +1 (434) 939-6006, [email protected]
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