What are your financial priorities for 2010?

In its monthly online poll, the National Foundation for Credit Counseling  (NFCC) asked consumers about their financial New Year’s Resoulutions.  More than 6,100 people responded as follows:

• Decrease debt- 76%
• Increase savings- 6%
• Improve my credit score- 11%
• Decrease my dependence on credit cards- 7%

Decreasing debt is certainly a worthwhile goal.  However, seeing only six percent cite saving as a top financial priority is worrisome.

Without adequate savings, a person is on a slippery financial slope.  When the inevitable emergency occurs, options are often limited to borrowing from friends or family, taking money from a higher priority such as existing bills, or charging the expense and adding to the debt load.

Financial experts recommend designating 10 percent of each paycheck toward savings to build a “rainy day fund.”  At the end of a year, you’ll have a little more than one month’s income set aside to help cover emergencies.

What are your financial priorities for 2010?  I’ve added several additional options for our informal poll.  Let me know your top financial goal for the new year:

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Celebrate a Year of Financial Progress

Did you make financial resolutions this year? Many Americans say they would like to save more, earn more, control debt and spend more wisely in 2010. But tackling all our goals at once can be overwhelming!  So, here is a year´s worth of financial tips tied to major holidays to spread out the load and increase your chances of financial success:

+ New Year´s Day (or anytime in January): Save more. Put savings on autopilot and skip the suffering of other resolutions (like dieting, exercise and stopping smoking.) Set up automatic deductions from your paycheck or auto-transfers from checking to savings. If you don´t see the money, chances are you won´t even miss it.

+ Martin Luther King´s Birthday: Get educated. Take an hour or two over the long weekend to study a financial issue you need to know more about. Calculate how much your consumer debt is costing you. Figure out what´s actually covered by your insurance policies and what´s not. Check the fees on your investments. Knowledge is power, so use it to your advantage.

+ President´s Day: Prepare for new credit card rules. The second phase of the Credit Card Act begins in late February. Study your February credit card bills for any changes. Note your payment due date, credit limit,and interest rate, all things which might be different with the new law.

+ Your birthday: Get your annual credit report. Take advantage of the once-a-year freebie to check your credit report for accuracy and to help avoid identity theft. Apply online at the free government website www.annualcreditreport.com.

+ Memorial Day: Consider your mortality. Talk to your adult children or your parents- or both- about your estate plans, end of life choices, charitable goals and other wishes. Ask about their plans, too. If you haven´t prepared a will or an estate plan, now is the time to do so.

+ July Fourth: Declare your financial independence. Now that the year is half over, review your financial status to make sure you´re still on track with your savings, investments and debt reduction. Work to become financially free.

Labor Day: Tame the monthly bills. Take a few moments to review the  monthly expenses which eat into your earnings to see if you can find some meaningful savings. Can you cut the cell phone bill? Combine cable, phone and Internet services for significant savings? Refinance the mortgage? Be sure to redirect at least part of any realized savings into a retirement or savings account.

+ Thanksgiving: Don´t let gift cards go to waste. Before the end of the year, round up all your unused gift cards. Go shopping for yourself or use for gifts for others, swap them with family or friends or donate them to a charity. Some cards may charge fees after a year without use, so use them soon.

+ Christmas: Reflect on what´s most important. Make sure your money gives the most value– resist tempting “wants” to focus on future “needs”, support organizations which share your vision and values, share with others less fortunate. You´ll find that doing something worthwhile with your money can be  priceless.

* Adapted from “How to Fix Your Finances in 2010″, The Wall Street Journal, Dec 30, 2009.

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Plan ahead to keep Santa out of debt

Every year thousands of Americans find themselves in financial trouble after the holidays, because Santa and his elves spent a little too much. But, planning ahead can help keep Santa out of debt.

Make a list, check it twice

Start the holiday shopping season by making a list of all the things you are likely to spend money on. This will certainly include Christmas gifts, but also think about holiday extras such as gift wrap, decorations, greeting cards, postage, extra groceries, eating out, special clothing, extra child care, gas and other holiday travel expenses.

Don’t forget to add in regular expenses which also occur this time of year, such as property taxes, charitable contributions, winter car maintenance, car tags (for those at the end of the alphabet), insurance and other year-end costs. Think about the likely cost of all the items on your list and compare to the amount of money you have to spend. The key is to create a budget– a spending plan that will help you cover regular and seasonal expenses– and stick to it.

Avoid holiday debt with planning and resolve

With a growing list of holiday expenses, more consumers may be tempted to turn to credit cards to manage the costs. But excess debt can certainly dampen the holiday spirit when the bills start arriving.

The first step to avoiding excessive credit card debt is to pledge not to charge anything that will be gone before it’s paid off, such as eating out or gas. Another step is to use only one credit card for holiday shopping and keep a spending log and all receipts. It’s easy to get caught up in the moment and lose track of how much has been spent if numerous cards are used.

Another way to avoid overspending is to have a specific amount of holiday cash in hand and not to withdraw more when it’s gone.

Remember the reason for the season

Finally, to put holiday spending in perspective, focus on the real reason for the Christmas season and look for non-material ways to celebrate and share with others. This will help to make the holidays more meaningful for everyone.

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“Couples and Money” class November 17

Finances are typically among the toughest issues couples will face. Adding in an economic downturn can increase anxiety about financial issues and strain relationships, too. Spouses and partners who agree to face difficult times and choices together can nurture – and strengthen – their relationship in the process.

Is money a topic of discussion in your marriage these days? Treat your spouse to an evening out for this helpful Extension program!

“Couples and Money”

Tuesday, November 17 at 6:30 pm- 8:30 pm

Finney County Extension Office, 501 S. 9th Street on the fairgrounds in Garden City.

Linda Beech, Finney County FCS Agent, will be your instructor with materials from the University of Idaho.

We’ll take a light-hearted look at men and women and the way we handle money. The program will cover different money personalities, setting mutual goals, and tips for smart money management during and after the holidays.

Enjoy a delicious free dessert and learn how to strengthen your marriage and improve your financial security with a dash of humor added for fun! Please pre-register for this class by Friday, November 13 to ensure adequate dessert and program materials.  Leave a comment, email me at lbeech@ksu.edu or call the Finney County Extension Office at 620-272-3670.

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Don’t forget those old savings bonds

Remember those savings bonds your grandparents gave you when you were a child? A recent article in The Wall Street Journal says now might be a good time to dust them off and see how much they’re worth, especially if decades have passed since you received them.

According to the US Treasury, there are $16.7 billion of matured savings bonds that people have not redeemed. And that’s money that could be used in tough times.

The bonds never expire, but they do reach maturity and stop accruing interest. Savings bonds that are no longer earning interest include Series E bonds issued from May 1941 through October 1979, Series H bonds issued from June 1952 through October 1979 and Series HH bonds issued from January 1980 through October 1989.

Redeeming Mature Savings Bonds

There are several ways to redeem savings bonds, but the fastest way is to go to your local bank. But first call ahead to make sure the bank redeems bonds and check to see what is required for redemption. For example, some banks may only redeem bonds for customers with longstanding active accounts.

Be sure to check the value of your bonds before heading to the bank. You can use the savings-bond calculator found in the Individuals>Tools section of www.TreasuryDirect.gov. If a bank teller informs you the bonds are worth less than the calculation you received online, call the Savings Bonds Direct customer service department at 1-800-245-2804 to find out how to proceed.

Redeeming Newer Savings Bonds

If you’re short on cash, you also may want to redeem some of your bonds that are still earning interest. First, check their current value and their earnings rate. If you’re thinking of redeeming relatively new bonds, know that you can’t redeem a bond for at least a year after purchase, and you’ll forfeit three months’ interest if you redeem the bond in its first five years.

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