|Sun, Mar 18, 2018 05:03 AM
|Wednesday, March 8, 2017 issue
|2004-01-23 communities |
|PIKEVILLE — As the holiday season has come to a close, some consumers may be haunted by the shopping ghosts of the holidays just past, as bank and credit card statements begin to greet them in the mail. Good intentions and holiday cheer can lead many to overspend beyond comfortable financial limits and leave them wondering what to do as the New Year begins.|
"This is the time of year when shoppers get carried away by the spirit of giving and soon after begin to feel the weight of overspending," says Samantha Graham. "High seasonal utility bills are also stacking up and adding to debt pressures as more people remain indoors to heat and light up their homes."
Over the past 10 years, average credit card debt for households with at least one credit card has more than doubled from $3,275 in 1992 to $8,940 in 2002, according to Cardweb.com, an online credit card information source. As credit card balances continue to grow, consumers can benefit from these tips to get the New Year started off right.
• Make a New Year's resolution to review your expenses each time you receive a paycheck to ensure that you are not spending more than the amount you make. You only need a short amount of time to review and revise your spending.
• Keep track of your bills. Designate a filing cabinet or secured box for bills and financial statements. Make separate files for bank statements, tax documents, credit card bills, medical receipts, mortgage statements and other records. Keep up with the due dates for bill payments.
• Create a monthly budget. Your budget is your spending plan. To create a budget plan, determine your monthly income and recurring expenses like rent or mortgage payments, utility bills, food, transportation costs, tuition, savings, entertainment and personal grooming. Then identify other recurring and periodic expenses like clothing, household appliances and maintenance, gifts, credit card purchases and vacations.
• Prioritize your expenses and spending. After writing down your expenses, prioritize each expense based on your needs versus your wants. Set spending limits and determine estimated costs for each expense. If additional funds are left over after all monthly expenses are paid, split the rest of your income between debt reduction and savings.
• Develop a diversified savings plan. It's important to save for both long and short-term goals. In addition to an emergency fund, be sure to take advantage of employer sponsored savings plans, such as retirement accounts and flexible spending accounts that help cover uninsured medical costs They may also lower the taxes you pay on payroll income.
• Recognize the early warning signs of debt trouble. You may be approaching a debt crisis if you are experiencing the following signs: You're behind on the basics, like mortgage or rent and utilities. You're using credit to buy items you should be able to buy with cash, like groceries. You are skipping some debt payments to make others. You're receiving overdue notices or telephone calls from bill collectors. More than 25 percent of your take-home pay is being used to pay back credit card debt.
• Don't suffer in silence, take action and get help. Call your creditors or seek helpful credit counseling. Don't be afraid to call your creditors. As soon as you know you're going to have problems contact your creditors and explain your situation and what you're doing to meet your debt obligations. Remember, your creditors would rather keep you as a customer than lose you to bankruptcy or foreclosure.
Consumers should review credit counseling services carefully, before choosing help. Find out if the agency offers money management advice without signing you up for a debt repayment plan. Ask the agency to explain their fees, services and national affiliation. Find out if they are a member of the NFCC, which signifies that the agency offers quality, reputable services.
Consumer Credit Counseling Service is a local, non-profit organization providing free and affordable money management sessions, credit and debt counseling, and credit report/credit score reviews. For an immediate phone session with a credit counselor or to schedule a convenient appointment at a local office, call our toll free number - 1-800-355-2227. Visit our website at www.cccservices.com. We have a local office in Pikeville, call 606-432-5337 for an appointment.