01/06/09 – Five New Year’s Resolutions to Help Your Personal Finances
Econ4U.org Offers 5 Useful Tips for Managing Your Finances in the New Year
WASHINGTON, DC — While it is important to make prudent financial choices in good times as well as bad, with the economy hitting a rough patch many Americans are taking a closer look at their budget to ensure they are making the right financial decisions for their family in the new year. The Center for Economic and Entrepreneurial Literacy (CEEL), Econ4U.org offers five easy-to-keep New Year’s resolutions which can help you manage your budget in 2009.
- Don’t incur any overdraft or non-sufficient funds fees. Overdraft fees are more expensive than any other conceivable type of short-term borrowing. Instead of paying up to $40 for as little as a $1 overdraft, keep track of your account balance. Ask your bank if they offer free online banking, and check your balance regularly to avoid any surprises. Young adults and low-income Americans are disproportionately bearing the brunt of the expensive and often hidden fees.
- Make a budget and eliminate unnecessary expenses. By keeping track of your budget, setting realistic goals, and putting money aside for unexpected expenses, you can ensure that you aren’t increasing your debt in 2009. Everyone has items in their budget that could be cut or replaced. Whether it’s substituting free office coffee for your $3 morning latte or cancelling the newspaper subscription (most newspaper content is available online now anyway), a few small choices to cut expenses can make a big difference in your year-end bottom line. Cutting that $3 per day coffee out of the budget saves you more than $750 over the course of the year!
- Pay your bills on time. Our most recent financial literacy survey showed that 1 in 3 Americans paid a bill late in 2008, and most of those people had the money to make the payment! The interest rate charged on late bill payments is more expensive than any other borrowing option, except bank overdraft fees. And each bill you pay late can be another red mark on your credit score.
- Find out what your credit score is. Lenders use credit scores to determine whether or not you qualify for a loan, what the interest rate on that loan will be, and how high your credit limits are. Know what your credit score is — and how to improve it — so that you can save money on interest and ensure you won’t be left out in the cold when you need a loan.
- Reassess all of your fixed bills. The cell phone, cable, or insurance plan you signed up for a couple years ago might not be the best available plan for your budget today. Can you cut down the amount of monthly minutes you are paying on your cell phone? Eliminate your home phone entirely? Cancel those premium channels? Raise the deductible on your insurance? Going through each of these bills one by one will almost certainly yield results.
“In 2009, it is important that all Americans redouble their efforts to ensure that they have the knowledge to make the best financial choices for their families and their budgets,” said James Bowers, Managing Director of CEEL. “Whether it is avoiding overdraft fees and late payments or cutting back on superfluous expenses, the new year is a good time to make a positive change in your personal finances.”
Go to Econ4U.org to learn more.
Happy New Year from Econ4U.
