Mike Wells: Get on a better financial track for the new year
January 3rd, 2022 by admin
One of the challenges some working families face is what to do with their growing pile of bills. And how to change their family’s habits to avoid their financial challenges getting worse. The best legal problems are the ones which never happen. Here are some practical tips to help.
Where to start? This is often the major question. Some wonder what to do. They think they are alone, or that they really should have figured it out on their own.
Trust me on this: You have no idea how many people with well-paying jobs have significant and mounting credit-card bills (and their high interest rates). They go from month to month, too. You have plenty of company.
One of the first steps is to identify some of your habits that recurringly push your money-out level over your money-in level. Here are some of the budget busters you face and what steps you can take to avoid them:
Dining out/pick-up orders several times a month: Cut down on the number of meals ordered out and cut down the expense of what you order.
Super-sized cable/streaming or dish plans: Do you use all those entertainment options? Think about any one-month period to analyze your viewing habits.
Is your cellphone plan the best one for you? And do you really use all the expensive add-on options?
ATM fees: They are very costly. Go to the bank and get your cash directly if you can.
DVD’s, podcasts, online subscriptions, impulse buying of books and clothing, lottery tickets or other games of chance, and “bad-habit” purchases such as excessive amounts of alcohol or possibly other addictive products. Take a month off from such purchases and try to break the habit.
Too many credit cards, multiple balances and multiple high interest rates. Try to use one or two and slowly reduce the balances on the others.
What are some of the tell-tale end-of-the-month downstream signs associated with overspending? The National Credit Foundation for Credit Counseling identifies these warning signs:
- Bills paid late or ignored
- Checking accounts routinely overdrawn
- Using credit as a permanent extension of your income, rather than living on your income, to maintain a lifestyle you cannot afford
- Are you unwilling to review how you spend your money?
- Do you know how much you owe?
- Are you afraid to check your credit report and score?
- Do you hide purchases from a spouse or significant other?
- Is shopping necessary or a relief from emotional stress?
Here are some practical tips to help you develop a real plan:
Get all your monthly and recurring debts written down in one place. Pull a form from the internet and start writing them down. You will be surprised to learn how much you owe.
Track your cash flow. On a monthly basis, what do you spend your money on and how much do you spend on each item?Check your credit score. You can check your credit score once a year for free at www.annualcredit.report.com; or 877-322-8228. It can tell you a lot about your most challenging habits.
Contact Financial Pathways of the Piedmont in Winston-Salem (www.financialpaths.org), a United Way agency, at 336-896-1191 (or 888-474-8015) and set up an inexpensive, brief and completely confidential conference to go over your basic financial circumstances. They can help you start a concrete plan to clear a path to better spending habits.
Use the beginning of this new year to find a new financial beginning for you and your family. Because no plan is a plan, but it is not a good one.
Remember: An informed choice is a smart choice.
Posted in: WS Journal Articles