Nonprofit Credit Counseling and Debt Consolidation

Creating a budget is a great personal wealth-creation strategy that will help you achieve both short and long-term goals. A budget allows you to:

• Understand where your money goes.
• Ensure you don’t spend more than you make.
• Find uses for your money that will increase your wealth.

To develop a budget you need to:

• Calculate your monthly income.
• Track your daily expenses.
• Determine how much you spend monthly on bills.

A budget is a constant work in progress. If you have a deficit at the end of the month, then you need to reevaluate how and where you are spending your money. The best way to accomplish this is to cut back on the expenses that fluctuate (food, entertainment, utilities, etc.). If you have a surplus at the end of the month, then you can begin investing your money and create greater wealth.

Scores reflect credit payment patterns over time with more emphasis on recent information. In general, a score may improve, if you:

• Pay your bills on time. Delinquent payments and collections can have a major negative impact on a score.
• Keep balances low on credit cards and other "revolving credit." High outstanding debt can affect a score.
• Apply for and open new credit accounts only as needed. Don't open accounts just to have a better credit mix – it probably won't raise your score.
• Pay off debt rather than moving it around. Also, don't close unused cards as a short-term strategy to raise your score. Owing the same amount but having fewer open accounts may lower your score.

Review your credit report regularly so you know what is being reported. It won't affect your score to request and check your own credit report.

• Start small.

Experts suggest you save 10% of your income. It's a good goal. But don't give up just because you can't save that much. Establishing a savings habit and saving consistently is better than putting aside a big sum just once. Start with something you know you can live with -- say, $25 a week. Promise yourself that you will save that much every Friday.

• Monitor your ATM withdrawals.

Decide how much you will take out each week and make it last. Make it a little tight. And try to decrease it over time if you can. If you have money left at the end of the week, put it into your savings account.

• Sign up for a 401(k) plan at work.

Contribute up to the amount of the company match, which is the amount your employer kicks in when you contribute. The most common match is 50 cents on the dollar. This gives you an immediate 50% return on your money.

• Set up an automatic investment plan.

You can arrange to have as little as $50 per month deducted from your account and deposited into a mutual fund account.

• Open an IRA.

Do this only after you’ve maxed out your company’s retirement plan. You’ll probably come out best with a Roth IRA, which means you contribute after-tax dollars, but then get to withdraw it in retirement tax-free. If, however, you think you’re going to be in a lower tax bracket at retirement or you’ve already contributed significantly to a regular IRA, you may want to stick with the traditional version.

• Account for your money.

People who know where their money goes, spend far less and save more. Keep a little notebook with you to record your small cash purchases.

The following steps will greatly reduce the chances of the frustrating and time-consuming consequences of identity theft.

• Order a copy of your credit report from each of the three major credit bureaus, and check for accuracy at least once a year.
• Place unique passwords on your credit card, bank, and phone accounts.
• Secure personal information in your home; especially if you have roommates, employ outside help or if you are having service work done in your home.
• Ask about information security procedures in your workplace.
• Don’t give out personal information on the phone, through the mail or over the Internet unless you’ve initiated the contact or are sure you know who you’re dealing with.
• Guard your mail and trash from theft.
• Give your Social Security Number only when absolutely necessary.

One the best ways to increase your wealth and ensure financial security is to invest your money. It’s important to analyze the different options available, determine what your goals are, your timeline, and finally what kind of risk you can afford to take. Help is available at your local financial institution on what the best options are for your situation. Here are some possible investment opportunities:

• Traditional savings account
• Money market savings account
• Certificate of deposit (CD)
• Stocks
• Bonds
• Mutual funds
• Individual Retirement Accounts (IRA)
• 401(k) plans

Your grocery/food bill is one of the items on your budget that is not fixed. This means that with proper planning you can actually increase the amount of disposable income available to you. Here are some suggestions:

• Have a plan. Make of list of what you need (not want) and stick to it.
• Shop with only cash. This forces you to stay within your budget.
• Identify weekly specials. If your grocery store is having a sale on chicken, make a few different types of chicken dishes for the week and freeze the rest.
• Use coupons. If you can save just $10 per week in coupons, that adds up to over $500 per year. When you think of it in those terms, it worth the effort. You can save even more if you use coupons in conjunction with sale items.

Try generic brands. There are some items that you can’t tell the difference, so why pay more?

Driving a car is virtually a necessity in today’s day in age. It can also be very expensive. There are, however, a number of things you can do to reduce your driving expenses while using your car. Here's a list of some things you may want to consider to reduce those expenses.

• Take the time to check your car's tire pressure each month. Under inflated tires reduce fuel efficiency by 2% for every pound they are under inflated. Under inflation also causes premature tire wear giving your tires a shorter use life. Consult your owner’s manual to find out your car’s optimal tire pressure (usually 32 lbs.)
• Drive at the speed limit. Cars use about 20% more fuel driving at 70 miles per hour than they do at 55 miles per hour.
• Avoid driving fast in low gears. Driving at high speeds in the improper gear can reduce fuel efficiency by up to 40%.
• Avoid using air-conditioning whenever possible. Air conditioning reduces fuel economy by 10% to 20%.
• Don't open windows when traveling at high speeds. Open windows on the highway can reduce fuel efficiency by 10%. It is much better to use the ventilation system. Also remember to remove car racks and other items that make your car less aerodynamic when they're not being used. Use cruise control to maintain a steady pace on the highway to increase fuel economy.
• Avoid rough roads. Driving on roads made of dirt or gravel can reduce fuel economy by up to 30%.
• Don't let your car idle. Even on cold mornings, there's no need to let your car idle for more than 30 seconds. Newer cars are designed to be driven almost immediately and letting your car idle longer is a waste of gas. In addition, it's more efficient to turn off your car and turn it on again than to let it idle for more than 45 seconds while waiting.
• Remove all excess weight from your car. Many people use their car trunk as a storage space adding unneeded pounds to the car's weight. This unnecessary weight reduces the car's fuel efficiency.
• Try to accelerate gently, brake gradually and avoid stops when driving. Gunning engines, quickly accelerating, and abrupt stops all waste fuel. Try to avoid driving during rush hour periods when you know traffic will be stop and go. If you do find yourself in stop and go traffic, try to maintain a crawl. When approaching hills or steep slopes, accelerate before the hill. Accelerating once on the slope will consume much more gas.