CFPD Blog Repost - Spring Clean Your Finances

4 tips to spring clean your finances

By Liane Weissenberger – MAR 20, 2018Share on Twitter

 
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Spring is here, and it’s the perfect time to get your home and your finances in order.

Here are a few ways to get started spring cleaning your finances:

1. Request a free credit report

You can request a free credit report  every 12 months from each of the three major consumer reporting companies (Equifax, Experian and TransUnion). Once you have your credit report, you can check for and correct any errors. This is especially important if you’re thinking of making any big purchases, like buying a new home. Our checklist will help you know what to look for in your credit report. Try setting a calendar reminder so you remember to check your credit reports on a regular basis. You can request all three reports at once or you can order one report at a time. By requesting the reports separately (for example, one every four months) you can monitor your credit report throughout the year.

Just like with the big three consumer reporting companies, you can also get free copies of your nationwide specialty consumer reports every 12 months from many of the specialty consumer reporting companies. Specialty consumer reporting companies collect and share information about employment history, medical records and payments, check writing, or insurance claims.

2. Address debt

If you’re facing a large debt or your payments are overdue, your first instinct may be to ignore the debt or hope it goes away. But, that may make things worse and lead to more stress down the line. There are strategies that can help you make payments that work for your current financial situation.

First, review your bills and make sure you understand what you owe. Our bill tracker  can help you stay on top of your payment due dates. 

Second, contact your lender to see if alternative payment options are available. You may be able to change your due date so that a payment is due closer to when you receive your income. Or, you could explore extended repayment options depending on your financial situation. 

3. Review your spending

Have you ever looked at your credit card bill and wondered where all those charges came from? Or, have you found yourself swiping your credit card for a purchase before you’ve had a chance to think about it? 

Gain control over your credit card spending by taking a close look at your credit card purchases over the past couple months. If you're looking to cut back, try breaking down necessary expenses vs. wants. Once you see how you’re spending, try creating a “rule to live by” to make sure you stay on track. These kinds of simple personal guidelines, such as using cash for smaller purchases, make it easier to stick to your goals over time. 

4. Save automatically

After checking your budget, you may see some more opportunities to boost your savings. For example:

• If you have a bank account and direct deposit, you may be able to arrange to automatically deposit some of your paycheck to a savings account every time you're paid, instead of all of it going into a checking account.
• You can check with your employer to see if it’s possible to split your paycheck into two accounts. You may also be able to transfer some of the money in your checking account into a savings account.
• You can check with your bank or credit union to see if you can set up automatic transfers.
• You may also be able to use a prepaid card to set aside money for savings. 

Did you know that nearly 46 percent of consumers indicated that they could not pay for an emergency expense of $400? When you save for unexpected expenses, you can handle them when they happen without having to skip other bills or borrow money. Start with $500 as your goal. This is enough to cover a lot of common emergencies, like car repairs, a plane ticket to care for a sick family member, or smaller medical costs. 

Are you carrying too much debt? Article from MMI

Early warning signs you're carrying too much debt

by Jesse Campbell on March 21, 2018

While many people know when their finances are in significant trouble, you may not recognize the early warning signs that you’re carrying too much debt. There are signs you can look out for that will let you know that serious financial trouble is coming and it’s time to do something about it before it gets out of hand. 

Here are a few warning signs that you may be able to relate to: 

No Savings 

If you don’t have an emergency fund, or have very minimal savings, you have nothing to fall back on if you should miss a paycheck or have an unexpected expense. And if you’re living paycheck-to-paycheck, any unexpected expense can put you behind on your bills. 

Stress with Unexpected Bills 

Does opening the mailbox fill you with dread? Are you wondering what will be there today that you’ll need to pay for? If an unexpected bill causes a strong emotional response, like anger or fear, then your finances are headed for trouble. Having an emergency fund will help to eliminate this dread and give you a little more confidence when you go to the mailbox. 

Money is Always on Your Mind 

While we all have days of worrying about an upcoming expense, if your thoughts are consumed on a daily basis with worry about your finances or how you will handle your bills, you have a problem. 

Hiding Purchases 

Most of us are guilty of hiding a purchase from someone because we don’t want them to know we bought a new pair of shoes or something else we really didn’t need, but if this is a habit, something’s wrong. Do you hide your non-essential purchases on a regular basis? If so, it’s probably because you know you didn’t need it and you really can’t afford it so you don’t want anyone to know. 

Only Making Minimum Payments 

If you’re struggling to make just the minimum payment on your credit card bills or loans, there’s a problem. These types of loans are high interest and will cost you more the longer it takes to pay them off. If you can only manage the minimum payment, it’s time to look at your debt. 

Using One Debt to Pay Another 

It’s one thing to pay your utility bills with your credit cards to earn points, but if you’re doing it because you don’t have the cash to pay them, that’s a problem. Not only are you going further into debt, you’ll end up paying more with the interest rates on your credit card. 

Your Card is Declined 

If your credit or debit card is declined when you try to make a small purchase, you’re clearly in trouble. You’re maxing out your credit cards and running your bank account down to its last dollar to get by. This is a big red flag that more financial trouble is coming because it only gets worse from here. Once you’ve drained your accounts and maxed out your cards, how will you pay your bills and buy groceries? 

If you can relate to any of these early warning signs that you’re carrying too much debt, it’s time to get a handle on your debt. Consider working with a debt and budget counselor or getting a second job if necessary.

Article written by Emilie Burke. Emilie writes about overcoming debt, while balancing trying to eat healthy, stay fit, and have a little fun along the way. You can find more of her work at BurkeDoes.com.

Taken from: http://www.moneymanagement.org/Community/Blogs/Blogging-for-Change/2018/March/Early-warning-signs-youre-carrying-too-much-debt.aspx

Consumer Financial Protection Bureau: You’ve got goals for your life—and some of them take money to achieve

FEB 23 2015

You’ve got goals for your life—and some of them take money to achieve

BY LAURA SCHLACHTMEYER

When you look ahead to your future, what kind of changes do you see?

You might envision major changes, like moving to a new city for a new job, starting a family, or helping your kids move out and live on their own.

You might anticipate smaller changes too, like starting a hobby or exercise program, upgrading your home appliances or technology, spending more time with friends or family, or volunteering more. Maybe you want to reduce your debt, or save up for a purchase instead of charging it.

Goals, whether long term or short term, usually cost money to accomplish. That means when you have a life goal, you probably have a financial goal, too.

Life goals—and financial goals—can be small or large, short-term or long-term. Helping consumers reach their own goals is an important part of our mission. Whatever your goals are, here are a few steps that can help you reach them:

• Set a financial goal. Let’s say you want to go on a vacation next year, and you set a goal of saving $1,000.

• Break it down into specific steps. You could decide to save $1,000, for example, by bringing lunch from home instead of buying it for $5 a day. Or you could set aside $20 from your pay every week for 50 weeks. Or you could find additional income from an extra shift or side job.

• Set up the system you need to make it work. Sometimes we forget the small things that can get in our way—like making sure you have the right kitchen supplies and groceries to make lunch every day, or opening a savings account to keep your vacation fund separate. Set up what you need in your life, so that you don’t have excuses to miss your goals.

• Get help sticking to your plan. You can set up automatic transfers at your bank, moving funds automatically from checking to savings. You can set a weekly alarm on your phone. You can ask a friend to remind you—or join you and save along with you.

America Saves Week can help you get started—and stay on track

Taking place from February 23-28 this year, America Saves Week gives you an annual chance to get started on saving. If your own goals include saving for the future, take the America Saves pledge today, and you’ll stay motivated all year with tips and reminders.

Now is the time to think about how to achieve the changes you envision for yourself. Know what motivates you, then take action. By meeting your financial goals, you’ll make a start on following your life goals.

When thinking about setting financial goals, consider what financial well-being means to you. Learn more about what consumers across the country told us about their financial lives and views of financial well-being.

Taken from:  http://www.consumerfinance.gov/blog/youve-got-goals-for-your-life-and-some-of-them-take-money-to-achieve/