CCCS STAFF SHARE IDEAS ON HOW TO MAKE YOUR 2014 FINANCIAL RESOLUTIONS STICK

As the New Year arrives, many of us “resolve” to be better, and resolutions to improve our financial habits often top our lists. 54% of the people who took part in Fidelity’s 2014 New Year’s Resolution Poll say they plan to make a money management change this year.  However, making a resolution is just the first step.  Transforming it into reality takes real work.  For advice on where to start, we asked employees at Consumer Credit Counseling Service of MD and DE (CCCS), a national nonprofit agency that helps thousands of clients reach their personal finance goals annually.  At a recent agency meeting, CCCS staff shared financial strategies they’ve used themselves to become more secure. Hopefully their experiences and insights will help you pinpoint changes you can make and profit from in 2014 and for years to come.

Begin with the Basics

Financial experts often say it pays to make a personal assessment before you make a resolution.  Where do you stand financially?  What sources of income do you have coming in?  Where does the money you earn go?  How much do you have left over at the end of the month?  Housing Counselor Ponciano Allen agrees with this advice.  She says, “My favorite money management tip is:  Set up and stick to a budget.  That’s the only way to really get ahead financially. As a divorcee with five children age 17 and under, budgeting has become a part of my everyday life.”

A budget offers a tool for getting ahead financially, but only if you stay within the parameters you’ve set.  This means living within your means. If you’re used to spending without thinking this can be a challenge and may require an attitude adjustment. Data Analyst Mark Chaffer says that when it comes to staying on track, he’s found it helpful to remember this saying: “Frugality isn’t about being cheap.  It’s about getting the most for your money.” 

To limit spending on nonessentials, Training Coordinator Aline Humphries suggests, “Ask yourself, ‘Can I pay for this in cash?’ If the answer is ‘no,’ then you probably can’t afford it and shouldn’t purchase it. It also helps to ask, ‘Do I NEED this item or simply WANT it?’ Only purchase items you truly NEED.  If you heed this advice, you may be able to build up reserves in a savings account.  That way when unplanned expenses crop up, you can handle them.”

Build Savings and Retirement

Over half the consumers polled by Fidelity said they hope to “save more” this year. But how? Human Resources Director Dinah Seisman says, “Many people just can’t see it in their budget to save -- yet this is the most important thing you can do for yourself, your spouse, and your children.  When my nieces and nephews were born, I began putting away $5 each week.  I had it conveniently deducted from my paycheck.  After I had saved a few years, I invested the money in a mutual fund to earn more interest.  At 18, they had more than $5,000.  That money is now earmarked for the down payment on their first home.”

Executive Vice President Lori Jankalski says, “When I first entered the workforce, I realized direct deposit is a great invention.  It allows you to have money taken automatically from your paycheck and put into your savings account.  Using this tool, you never miss the amount you’re saving.”  One of CCCS’s newest employees, Administrative Support Representative Eddie Lee says, “Since starting work, I’ve made sure I automatically put 10% of each paycheck into savings. Then I earmark the rest of it for items like food and gas.  That helps me stay on budget.”  Compliance and Quality Assurance Manager Marc Benz notes, “My father always told me to put half of any raise you receive at work into savings.  That’s been good advice I’ve followed.”

Business Development Manager Donna Snyder says, “It’s important to have an emergency savings fund, because you never know what will happen.”  But what if you never have enough money left over at the end of the month to put away?  Snyder says one way to accrue that extra cash is to spend less. “When I used to shop for groceries, I would just go down the aisle and pick up anything I thought I needed or wanted.  Then at a workshop, they suggested we check to see what we already had in the freezer before doing our weekly shopping.  That rule has saved me a lot on my food budget.”

Financial counselor Gail Pridgeon offers this long-range savings idea:  “To start the New Year right, why not schedule a ‘money check up’ with your Human Resources Department? Find out about your retirement benefits.  If you’re part of a 401(k) or 403(b) plan, ask if your employer offers a match.  If it does, contribute enough to take advantage of this opportunity.”  Resource Development Manager Devon Hyde adds, “Any time I get a raise, I increase the amount I put into my retirement fund.  My husband Dan and I both do this regularly.”

Control Your Credit Use

“Pay off debt” is another popular financial resolution. 24% of those polled by Fidelity hope to do so this year.  A simple way to reduce the amount you owe is to limit the amount of debt you take on. Manager of Counseling Erin Dickerson says she’s always used credit cards, and this tip has helped her stay out of trouble: “After I charge something, I immediately write it down, and I regularly keep track of how much I’ve spent.  I never charge more than I know I can pay off in full each month.  I stop before I reach that limit.”

Client Relationship Manager Josephine Ore says, “Your credit card statement includes some interesting reading:  It shows how much extra you’ll owe if you only make minimum monthly payments over time.  It also lists the fee you’ll be charged if you’re late. Make every effort to pay down credit card balances as soon as possible.  If you don’t, you may end up with a much larger balance than you initially charged.”

How does interest accumulate if you only pay the minimum monthly balance on credit cards?  President and CEO Jim Godfrey shares this example: “Say you owe $1,000 on a credit card with an 18% APR and only make the minimum monthly payment.  It will take you 12 years and 9 months to pay off the balance, and you will have paid $1,115.41 in interest -- even more than the initial amount you borrowed!”

If you’re already in deep debt, don’t despair.  It is possible to take control.  Information Technology Manager Marc Burtz says, “When my wife and I started out, we didn’t know a lot about personal finance.  We bought a car and started getting credit cards.  Before we knew it, we’d maxed these out and were in serious financial trouble.  After we went bankrupt, we spent years paying cash for everything.  That helped educate us financially.  Now we each only have one credit card that we use for necessities and we regularly put money into savings. Learning to live within our means has made it possible to get ahead.”

With 35 years of experience, Senior Counselor Judy Hines offers this parting advice: “Go forward -- not backward.  If you make a money management mistake, don’t dwell on it.  Reach out and get help instead. That’s the best way to fix things.  If you learn from your slip up, you’ll always end up in a better place.”  Want help honing your financial goals for the 2014?  Contact CCCS of MD & DE at 1-800-642-2227 or visit the agency’s website and start the New Year strong!

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Consumer Credit Counseling Service of MD & DE, Inc. (CCCS) is an accredited 501(c)(3) nonprofit agency that helps stabilize communities by creating hope and promoting economic self-sufficiency to individuals and families through financial education and counseling.  CCCS MD State License #14-01.