Are your clients pointed in the right direction? Gail Cunningham of the National Foundation for Credit Counseling recommends that people review where they are in order to determine where they’re headed, as well as encouraging them to consider implementing certain tips. The NFCC was founded back in 1951 and is the nation’s largest and longest serving national nonprofit credit counseling organization. She says that a few simple steps can make a dramatic difference in one’s financial life.
- Get Organized. All financial papers should go in one place, whether it’s a shoebox or a huge safe. Doesn’t matter. The idea is to save you time and aggravation searching for documents.
- Regular Financial Visits. At least once each week, review bills and note their due dates. It means planning to mail payments between seven to 10 business days in advance of the due date. At home, I generally do bill paying online but when the bill comes in, I indicate the date it needs to be paid (or mailed) where a stamp would normally go and I arrange them in chronological order, checking them daily. Who needs top incur late fees?
- Online Banking. If you decide to pay by an online facility, one tip here is to make each payment a one-time payment; in other words, instead of setting up payment for accounts automatically, you want to control what is happening.
- Constant Checkbook Balancing. My wife does this. Each time she makes a deposit or each time she makes a payment, she enters it in the checkbook and brings the balance forward. She has never had an overdraft or incurred unnecessary fees.
- Immediate Bank Reconciliation. Do it as soon as it arrives. Most people don’t do this, unfortunately. They let the statements pile up and then they have the arduous task of sitting down for hours trying to make sense out of it all. Cunningham points out that it’s far easier to tackle this task once a month rather than spending hours chasing down a penny from several months back.
- Create Budget. You could call it a spending plan if you like. Of course, it doesn’t have to be restrictive but what it does is to permit you to spend your hard-earned money the way you want to. In effect, you are in control of your finances, which is the way it should be.
- Track Spending. I find from experience that the large expenses are not the ones that trip us up. It’s all those small items, along with periodic payments. You want a trick? Cunningham suggests you try writing down every cent you spend for 30 days and then go back and review your expenses to see how much you were over or under your projected spending for each category in your budget.
- Start Saving. Easier said than done, for many people, but try starting small. Let’s say 10 percent of your take-home pay into an interest bearing account. Forget it’s there and treat it as an emergency fund. You’d be surprised at how it can build. And look for any windfalls such as lottery winnings, no matter how small, raises, bonuses, birthday checks. It all adds up.
- Contribute the Max. Your goal is to make the maximum commitment to your company’s retirement plan. In any event, make sure you’re at least contributing the amount the company will match. Otherwise, you’re really throwing away free money.
- Insurance Check. You don’t want to be under-insured and you don’t want to be over-insured. Try an annual visit with your insurance provider to make sure your policies are lined up properly with your needs.
- Debt Tackling. To many people, a lot of what is said above is thrown into the sink because of credit card debt which prevents you from saving. The best medicine? Stop digging in that ditch. No more charging. You can’t become debt free while still adding to your debt load. Try making purchases with cash or a debit card. This way, when the money’s gone, the spending stops.
- Credit Reports. You can get one free credit report from each of the major bureaus every 12 months. Go to www.annualcreditreport.com to access the reports online.
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