Credit Counselors Recommend Getting Fit Financially

At the start of the year, a lot of Americans are probably concerned with the weight they gained during or over the holidays. Most of them are looking into how they can lose all that weight. Far more important for American consumers this year, however, is the need to trim down their finances, get rid of debt and build up their savings. The economic crisis brought this fact home hard for many Americans last year and it would be a shame if consumers once again fell for their “buy, buy, buy” mindset just as the economy begins to show small signs of recovery.

Consumer Credit Counseling Service (CCCS) – now known as the Apprisen Financial Advocates – community outreach director, Jana Castanon says that consumers need to let go of their “I want when I want it!” attitude. American consumers have lived their lives by that mantra for far too long, she says and Americans have low bank account balances and high credit card debts to prove it. “It is time to make a plan for a brighter financial future,” she says.

Another counselor at CCCS, Mike Hanneman suggests to his clients to start tracking their expenses for two weeks. He says that when consumers put the figures down in paper, in black and white, they can easily see where their expenses are.

After figuring out their expenses, Hanneman tells his clients to make a budget. They should identify which of their expenses are fixed expenses such as rent and mortgage payments and which are flexible expenses such as groceries. They should also add periodic expenses such as property taxes and car insurance. Once those are written down, consumers can then set up their budgets based on the expenses. They can then see how much money they can use to build up their savings account.

In building up their savings, Hanneman says that consumers should make a habit of “paying yourself first.” A lot of people place savings at the bottom of their budget. They only leave as savings the amount that is left over from their budget.

Castanon also adds that consumers need to get out of the habit of thinking that they are free to do with whatever is left of their money after they have paid their bills. What they should do is to use that money to establish or build up their savings. A savings account is very important and can really help consumers when they meet budget breaking expenses such as insurance payments, gift expenses and vehicle repairs.