Finance doesn't have to be a dirty word

Finance.

It's a topic that most parents and kids don't discuss, at least not as often or as in depth as they should. And it's something many teens don't hear enough about in school.

When I was a kid, I remember saving pennies, dimes, nickels, and (oh, joy!) quarters. I'd roll them up and my Dad would take me to the bank to cash it in. Eventually, I had my own "bank" and made deposits in secret stash accounts within my home.

Once I reached high school, I made some cash with my own tutoring and babysitting gigs. I felt that I was pretty responsible with my money, budgeting enough for needs and wants, and eventually opened a checking and savings account to start putting away some $$ for college life.

Hey, I even took accounting as an elective!  Maybe I was genuinely interested in feeling more money conscious. Or maybe it was to avoid the homemaking class, because the idea of cooking, baking, and sewing made me cringe (still does sometimes). Whatever the case, it was in accounting that I learned about personal finance (assets, budgets, cash flow, etc.). It was not in my economics class or any math class, for that matter.

And not much has changed.

I went on to college to make my own financial mistakes and learn from them. And though I was pretty frugal compared to my friends and other college kids, I didn't know things.

I didn't know about credit, or how to pay back student loans, or the importance of an emergency savings. After graduation, I felt so ignorant to these things, as I'm sure a majority of students do.

So, as much as I hope our Money Rocks program will spread like wildfire into the schools and touch thousands of lives, I thought I'd also put together a few tips for the parent (or the teen) preparing for the future.

1. Have open conversations. Parents and teens need to talk about budgets. Look at how much the parent makes and the monthly expenses, then see how much is left at the end of each month. It's pretty eye-opening!
   
   
2. Open a bank account. Seriously, I wish I would have done it earlier than I did. It's important to have the experience handling both virtual money AND cash AND a debit card before going off to college. It's a great time to experience the feel of a plastic card in the hand, without the threat of going into credit card debt!
   
   
   
3. Make some money! Anyone at any age can earn money. Help neighbors with yard work, practice saving birthday money, babysit, wash cars, tutor, part-time job at a retail store, or come up with your own business idea! It's so much easier to save money when you don't have responsibilities and a ton of expenses to worry about.


4. Pay yourself first. 
   You'll hear our staff say this all the time. And it's a tip that REALLY works. Setting money aside early means more money later! Pick a percentage of what you want to put in savings, and stick to it.
   
   
   
5. Write down needs versus wants and think about goals! Time to prioritize how you want to spend money. Being specific and having a plan makes it easier to save money.
   
   
6. Give. I was taught to give 10% of my income to my church. So whether it's church or charity, it's important to invest in something selfless and meaningful.
   
   
7. Emergency fund - do it. Establish a separate savings account that's just for an emergency. That way when something big happens (car accident, for example), it's handled.
   
   
8. Think about retirement. Well, at least a Roth IRA! These can be used without penalty to help pay for a first home, to pay higher education expenses, and even to pay medical bills. And, guess what? If the account is open for at least five years, there are no penalties for using it before retirement. For a person under 18, a Roth IRA can be opened as a custodial account. There's usually no fee to open one, but there may be a minimum contribution requirement. Definitely check it out! 
   
   
9. Work your butt off in school. I know school can really be a drag and teachers just don't get it, but it's such a small speck in time. Bullied, having relationship issues, family hardship, etc.? Keep your head high, find a support system (outside of school), and be yourself. You will continue on and live an awesome life that only gets better! Believe me, I've been there.
   
   Work hard now, look to your future, and be smart with your money. Start looking for scholarships and grants early if you plan to go to college. Research student loan options and ask about repayment options BEFORE ever taking out a loan. OR look into an apprenticeship if you want to go straight into the workforce. Some businesses will even pay for you to go to school part-time while you work.

Finance. It's not a dirty word. Talk about it. And take some preventative steps to ensure a secure financial future! If you want some guidance, feel free to contact us for some financial coaching at 843.735.7802 or info@fsisc.org.

By Jenna Johnson, Marketing & Development Director

Why Financial Capability Matters in 2014

Last year, the White House declared April Financial Capability Month, proclaiming that “all Americans deserve the chance to turn their hard work into a decent living for their families and a bright future for their children. Seizing that opportunity takes more than drive and initiative -- it also requires smart financial planning. During National Financial Capability Month, we recommit to empowering individuals and families with the knowledge and tools they need to get ahead in today's economy.”

With the unemployment rate in South Carolina steadily decreasing from 8.1 percent in February 2013 to 6.4 percent as of February 2014, it’s crucial that those gaining employment use practical money management skills. That’s where financial education comes in. Financial education is a means to help alleviate and prevent poverty. Although the unemployment rate is down in South Carolina, the number of those in poverty is up. Currently 1 in 5 South Carolinians live in poverty compared to 1 in 6 in 2000. That’s nearly 300,000 more residents.

Image via Pearson Foundation

Regardless of your economy or your household income, it’s important to realize that financial education matters. Those individuals who receive it are more likely to make the right financial decisions for themselves and their families that will help them build and maintain assets. When people are buying houses, maintaining a home or steady residence, and are paying on their debts, it positively affects the local economy.

Financial education is more than just gaining a budgeting tip here and a saving strategy there. This knowledge converts into skills, which convert attitudes, and those attitudes affect behavior. What you’re left with is healthy financial habits. Those that take charge of their personal finance and choose to become informed consumers avoid scams, predatory lending and other deceptive practices, and can effectively address their needs versus wants.

Family Services, Inc. (FSI), as a charter member of NeighborWorks America, aligns itself with the initiative to help end poverty and raise better awareness for financial education. Their staff of licensed professionals is dedicated to highlighting the importance of financial capability and helping those in the community establish and maintain healthy financial habits. Through its programs and services, FSI advocates, counsels, and educates for clients so they can make the most of what they have.

Written by: Sarah Cornwall, Marketing Resources, at Family Services, Inc.

Make a New Year’s resolution to rid stress from your life…

It’s simple, get your finances in order--you won’t believe how good it feels to be money smart.

Tips for making the list:

BE POSITIVE.

Sometimes this is easier said than done. To keep in the mindset, try wording your goals positively, such as “we’re going to spend money only on things we truly value.” If you stray from your goals, don’t beat yourself up or dwell on your mistakes. It will only serve to make you feel worse and keep off track. Just jump right back on that horse and promise yourself to stay on the path.

Keep your resolutions attainable.

Check in with your goals at least once a month. Set a reminder for yourself. For instance, decide that every time you make a payment on that credit card bill, you’ll revisit your financial resolutions; this will help you track how far you’ve come. Remember that if you’ve made it this far, you can reach your goal!

Be specific.

Make instructions for yourself for just how exactly you plan to attain your goals. Instead of saying you will save more, write a budget up. This will help keep you on point.

Make a contract with yourself.

With your resolutions set, document all your goals. You could even include reasons for committing to them. At www.FutureMe.org, email this to your future self a month, two months, six or 12 months in advance, or print out the letter and place it on the fridge, so you can be reminded of why these goals are important, especially when other crises seem to get in the way.

What our in-house experts recommend you put on the list:

Review your insurance.

Your policies may be outdated and not suited for your current needs. Review what you have: homeowners, life, even auto may be insufficient relative to your present financial situation.

Check your credit score.

Be aware of where your credit stands and take steps to repair any negative aspects. You get three free credit reports each year, there is no excuse for not reviewing what is one of your most important financial reports, especially since errors in these reports are not uncommon. www.annualcreditreport.com

Invest what you can.

Even if it’s just a little, invest in yourself and family. It could be as simple as paying yourself first by contributing to your savings each month, or it could be a retirement fund, an education fund, or making extra mortgage payments. Consider these things as investing in yourself and your future.

Taking care of these will allow you to enjoy a happier, more prosperous and stress-free new year.

Written by: Sarah Cornwall, Marketing Resources, at Family Services, Inc.

SC Credit Monitoring Update

If you were affected by last year’s South Carolina Department of Revenue security breach (SCDOR), be sure to enroll in the free credit monitoring service that opened enrollment on October 24^th. The State of South Carolina has signed a year contract with CSID, a leading provider of comprehensive identity protection. 

All eligible SC Taxpayers may enroll at www.scidprotection.com or by calling 855-880-2743.

Once you enroll yourself, be sure to add your minor child or children. As a courtesy the state is offering Child Monitoring coverage through CSID for children under age 18, for up to 12 months. This coverage allows you to monitor any addresses and aliases associated with your child’s Social Security Number, and see if your child’s personal information is being bought or sold online.

 

Be sure to watch out though; last year’s provider of ID protection, Experian, is still sending offers to extend their identity protection services to SC Taxpayers for 99 cents a month, despite the free protection offered by the state through CSID. Experian would make about $18 million if all of the 1.5 million affected taxpayers who signed up last year with them took the offer.

Check with SCDOR at http://www.sctax.org/security.html for updates. The state is anticipating that it may have to pay for taxpayer protection for years.

Further Security Tips

As a preventative and an effective layer of security, our experts here at FSI advise not to pay out for protection, but rather freeze your own credit report and self-monitor. Credit freezes are one of the most effective tools against ID theft available to consumers.  And it is completely free!

Make sure any online websites where you input sensitive information is secure. A good indicator of a secure website is an https versus http web address. If you're just browsing the web and not entering any sensitive information, http is fine. However, on pages where you enter your password, credit card number, or other financial information, you should always look for the https prefix. Additionally, never store your information, specifically passwords or Social Security Numbers, on Internet browsers.

Identity manipulation and theft victimizes more than 15 million United States residents each year. That is SEVEN percent of all adults, with financial losses totaling near $50 billion. ID and credit protection is important. By taking the time to secure your credit, you will save yourself from the havoc, time, stress, and expense it takes to resolve ID theft.

Find more tips here: http://www.fsisc.org/topic.asp?pid=142. 

Written by: Sarah Cornwall, Marketing Resources, at Family Services, Inc.

Quick tips to get you on the path to homeownership

Owning a home is a great way to build an investment and see return on all the “rent” you’re already paying month to month. Right now, interest rates are STILL at an all-time low. If you’re mortgage ready, take advantage of this and get yourself a good deal!

1.   Look at your budget and determine how a house fits into it. Fannie Mae recommends that buyers spend no more than 28 percent of their income on housing costs. If you pay more than 30 percent of your gross monthly income to put a roof over your head, you are living ABOVE your means. The term “HOUSE POOR” will have real meaning.

Keep in mind: Owning a home is not like renting – you are the landlord. When it breaks, you fix it. EXPECT unexpected costs. When new appliances, roof repairs and plumbing problems pop up; these costs can drain your bank account.

2.   Go to a bank or lender to get pre-qualified. This initial step allows you to assess any goals or needs you may have regarding your mortgage with your lender. From here, you can learn about your various mortgage options and the type that might be best suited to your situation.

Keep in mind: Being pre-qualified is NOT the same as pre-approved. It is strongly advised that those seeking homeownership do not house hunt until they are pre-approved, which is much more extensive.

3.   Find a realtor once you are pre-approved and set on what you can afford. Meet with a few agents, to find one you feel confident with. An agent who is a member of the National Association of Realtors is a good sign as they adhere to a strict ethics code.

Keep in mind:  A good real estate agent can help guard against any pitfalls you may encounter during the process, so choose wisely.

4.   Know and understand the various mortgage products available to you. Factor in closing costs you can afford. This will help you choose the best mortgage program for you. As a first time homebuyer, options may be available to you, such as low interest programs and down payment assistance.

Keep in mind: If you plan to move within five to 10 years, an adjustable-rate mortgage (AMR) could be beneficial. However, if plans change and you stay in your home for longer, you may be stuck with payments you can’t afford.

5.   Try to hold off on big purchases or any decisions that could affect your credit once you’ve signed a contract and a closing date is set. Typically, lenders pull credit right before closing to make sure nothing has changed with your financial situation.

Keep in mind: If you feel over-stressed, lost, or uncomfortable with the homebuying process or any part of it, don’t be afraid to ask for help. The Homeownership Resource Center, a division of Family Services, Inc., not only offers help and guidance, but piece of mind.

To learn more about the workshops and individual appointments we provide with our licensed homebuyer coaches, contact us at 843.735.7862 or info@fsisc.org.

Written by: Revena Dawson, Home Purchase/Credit Advisor, & Sarah Cornwall, Marketing Rescources, at Family Services, Inc.

Making Ends Meet: Budgeting made easy!

Forget penny-pinching, unless you enjoy that. We like to make budgeting fun. Making minor adjustments to your financial behavior can make a world of difference.

• Start with a WARM-UP. No one ever begins an exercise routine with a marathon. Pledge a few minutes a day for a week to get organized. Gather those bills and sort them into piles. Maybe even create a calendar with bill due dates. If you are “techy,” try a Google calendar with reminder emails.

• Time to ASSESS. The next week, use that same few minutes a day to check in on your financial health. Look up your credit score on annualcreditreport.com (nowhere else, please!), check your bank account balances, and review your retirement plan.

• Now... PLAN with a purpose! Choose a goal that would change your life in the short-term. Maybe you want to switch careers, go back to school, maybe BUY A HOUSE?!

• STRATEGIZE. Break that goal into smaller pieces. Once you accomplish it,
move on to the next goal!

And, if you decide that buying a home may be one of your upcoming life goals, be sure to contact us!We can assist you in credit improvement, budgeting, debt management, and homebuyer education.


Call to learn more or to schedule an appointment at 843.735.7862 or email info@fsisc.org.


Written by: Jenna Johnson, Marketing and Development Director at Family Services, Inc.

Bankruptcy: not the "easy" way out

So, we all know who Gabby Douglas is.  She’s America’s new sweetheart with the huge beautiful smile that had all of us glued to the television during the Olympics. One thing you may not know about little Gabby, is that her mother had recently filed for bankruptcy.  When seeing that information, I’m sure many of you gasped. There has always been a stigma attached to that word, but there doesn’t need to be. Bankruptcy is a federal law that enables individuals/couples to have a restart or a reorganization of their debt. It can also save a home from foreclosure, car from repossession, or stop wage garnishments. All that being said, it should still be used as an option of last resort.

Natalie Hawkins, Gabby’s mother, filed Chapter 13 bankruptcy in her home state of Virginia.  A Chapter 13 is a reorganization of the debts owed. This chapter allows for filers to keep their home and to make payments to the courts on their debts for a predetermined amount of time. This varies from the Chapter 7 which is basically a liquidation of assets and a complete dissolution of dischargeable debts. The major difference is that in a Chapter 13 bankruptcy, the debtor pays back their debts. In a Chapter 7, the debts are wiped clean.

Ms. Hawkins has four children, including Gabby, to worry about. She is listed to be on disability and have child support coming in, so she does have income, but no room for additional income. This takes her out of working with a debt management program or possibly applying for Hardest Hit Funds through counseling agencies if they are offered in her area. If she had come to receive counseling through our program, we would have told her to prioritize her bills. Her first priorities should be housing and transportation, which in her case, were saved through her bankruptcy. Filing for bankruptcy has allowed Gabby’s mother to relinquish the stress and headache of worrying about delinquent house and car payments or her other debts, and to now focus her attention on all of her children including her 16-year-old, two-time Olympic gold medalist daughter. If, in doing this, she has been able to assist her daughter in realizing her dream among other things, then why not?

I also find it commendable that Ms. Hawkins isn’t letting the publicity around her financial situation to get the best of her. This has been something that she’s had to deal with and has done so humbly and publicly. She should even be an inspiration to many folks who bury their heads in the sand and try and pretend it isn’t happening to them. Ms. Hawkins has stood up and faced her problems, received assistance, and handled business – WAY TO GO!!

Just goes to show you that life may throw you a curveball or two (sorry for the cliché), but things can turn around at any moment. Gabby is going to be given many sponsorship and appearance opportunities and should be able to help her mother in return for the sacrifices Ms. Hawkins has made for her family. No hard feelings or judgments here. Just remember, credit issues are just stuff that can be fixed and improved in time – it’s always a work in progress. And…if all else fails, time will heal all wounds (especially in regards to your credit).

Go to www.fsisc.org or call 843.735.7802 for bankruptcy information or assistance. 

Written by: Kristin Glantz, bankruptcy counselor at Family Services, Inc.

April's Credit Club!

Click here to register!!!

Conquer Your Credit Fears by Attending the Credit Club!

Become informed and educated on topics of interest that will help you to understand and effectively manage your credit. The Credit Club meets on the first Thursday of every month to discuss various topics that relate to individuals improving their credit and financial stability. Credit Club sessions are facilitated by a licensed Credit Counselor and/or a professional in the subject area to be discussed.

Next Credit Club Meeting is this Thursday, March 1, 2012:

Join us this Thursday and learn about “Car Buying- Tricks and Treats”. Issues to be presented by a former car salesperson and a former finance manager will include:

· What your car dealer doesn’t want you to know;

· Confessions from a car dealers back room;

· How to buy a new car;

· Winning in car negotiations.

What You Need to Know:

There is no charge to attend the Credit Club meetings but pre-registration is recommended. The Credit Club meets at 4925 Lacross Road, Suite 105 in North Charleston from 6:00 pm – 8:00 pm. For more information and/or to register to attend a FREE Credit Club meeting call 843.735.7862 or visit us online at www.fsisc.org and view our calendar of events.

Use Leap Year to Get Your Financial House in Order

NFCC Offers Financial To-Do List for February 29

Washington, DC – If there’s one thing everyone wants, it’s more time, and that’s exactly what we have this year. A once every four-year phenomena of the calendar known as Leap Year is providing us with 24 extra hours this February 29.

For some, the day will come and go with little to show for it. However, with a little forethought, people can use the extra hours to make a difference in their financial lives. The National Foundation for Credit Counseling (NFCC) suggests that consumers dedicate this gift of time to tackling the financial tasks they may have been putting off.

Prepare federal income taxes. Gather all 1099s, W-2s, and receipts related to eligible deductions. Whether filing on your own or through a professional, these items will be needed to prepare an accurate return.

Create or organize a home financial center. Since the financial documents are out, create files for each category. This step will help you stay organized all year long, and will make preparing next year’s tax return much simpler.

Review all insurance policies. The time to become familiar with insurance policies is not when you make a claim. Insurance is not something to buy and forget, as life changes often dictate adjustments to the policy. Make an appointment with your insurance provider to confirm that your current needs match your coverage.

Review retirement contributions. Due to the payroll tax cut, working Americans now have extra money in their paychecks. The best use of this money could be increasing the retirement contribution at work. Make sure to maximize the benefits of an employer match and age-related allowable contribution increases.

Order your credit report and score – With good reason, people are very interested in their credit score. However, many do not realize that the score is based on the information in the credit report. In spite of it being free through www.annualcreditreport.com, the NFCC Financial Literacy revealed that 65 percent of Americans had not ordered their credit report in the last 12 months. The credit score didn’t fare any better, with 63 percent of respondents indicating they’d not ordered their score. Even though there will be a small fee charged to obtain the credit score, it will be money well-spent, as these three numbers dictate much of your financial future.

“Those who use the extra time afforded by Leap Year to accomplish these five financial moves will wake up March 1^st with a well-earned sense of accomplishment,” said Gail Cunningham, spokesperson for the NFCC. “The efforts they put forth on this bonus day will yield rewards throughout the year.”

If you need free or low-cost professional help putting your financial house in order, reach out to an NFCC Member Agency today. To schedule an appointment with a Certified Credit Counselor at the agency closest to you, dial (800) 388-2227, or go online to www.DebtAdvice.org. For assistance in Spanish, call (800) 682-9832.

The National Foundation for Credit Counseling (NFCC), founded in 1951, is the nation’s largest and longest serving national nonprofit credit counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services. NFCC Members annually help more than three million consumers through close to 800 community-based offices nationwide. For free and affordable confidential advice through a reputable NFCC Member, call (800) 388-2227, (en Español (800) 682-9832) or visit www.nfcc.org. Visit us on Facebook: www.facebook.com/NFCCDebtAdvice, on Twitter: twitter.com/NFCCDebtAdvice, on YouTube: www.YouTube.com/NFCC09 and our blog: http://financialeducation.nfcc.org/.

Consumers Remain Committed to Using Credit Cards

National Foundation for Credit Counseling Poll Reveals Top Financial Resolutions

Washington, DC – According to the National Foundation for Credit Counseling (NFCC) December online poll, consumers remain very connected to their credit cards. When asked to rank their 2012 financial resolutions, only six percent of more than 2,300 respondents indicated that decreasing dependence on credit cards was their number one goal.

“At first glance, that statistic could appear to be a warning sign of future trouble. However, credit is not the problem. Instead, it is the misuse of credit that leads people into financial distress,” said Gail Cunningham, spokesperson for the NFCC.

Balancing the continuing reliance upon credit, an encouraging statistic from the poll is that the overwhelming majority, 62 percent, selected decreasing debt as their focus for 2012. “If consumers are able to decrease their debt load, continuing to use credit responsibly will help them meet the goal selected by 24 percent of respondents, that of increasing their credit score,” continued Cunningham.

While decreasing debt is always a positive, consumers should not neglect savings, yet that is exactly what respondents appear to be doing. Only eight percent of those weighing in ranked saving as their most important resolution. Without the security of a well-funded emergency savings account, consumers are living without a financial safety net, as unplanned expenses will occur, usually at the worst possible time.

The poll also revealed some interesting trending from 2010 when the identical question was posed. Showing the largest percentage difference between the years, the 2010 poll noted 69 percent of respondents were most interested in decreasing debt, compared to 62 percent in 2011.

The second largest year-over-year difference involved improving the credit score, with that category posting a six percent increase. In 2010, 18 percent of consumers chose increasing their credit score as their main goal, while in 2011, 24 percent selected that category as most important in the New Year. This increase indicates that consumers understand the relationship between the credit score and obtaining credit, confirming their interest in continuing to have access to credit.

“The poll suggests that consumers have recognized the importance of achieving financial stability, and intend to action. Nonetheless, even though paying down debt and improving the credit score are positive steps, the low priority placed on savings is disturbing,” said Cunningham.

The actual poll question and answers are as follows:

My #1 financial New Year’s resolution for 2012 is to:

A. Decrease debt 62% (December 2010 poll = 69%)

B. Increase savings 8% (December 2010 poll = 7%)

C. Improve my credit score 24% (December 2010 poll = 18%)

D. Decrease my dependence on credit cards 6% (December 2010 poll = 7%)

Note: The NFCC’s December Financial Literacy Opinion Index was conducted via the homepage of the NFCC Web site (www.DebtAdvice.org) from December 1 - 31, 2011 and was answered by 2,319 individuals.

Americans Strongly Value Paying Down Debt Over Saving

Washington, DC – According to the August poll hosted on the National Foundation for Credit Counseling (NFCC) website, 89 percent of more than 2,900 respondents value paying down debt over saving money.

“People often debate which is more important, to be debt free or to have a robust savings account, and the answer is both,” said Gail Cunningham, spokesperson for the NFCC.  “As important as it is to handle debt responsibly, the truth of the matter is that the unplanned emergency is inevitable, and savvy consumers will recognize this and prepare for it.”  

January 1959 was the first month that the Bureau of Economic Analysis provided savings data.  According to that initial report, the personal savings rate in the United States at that point was 8.3 percent of disposable income, equating to the average person saving approximately one-month’s take-home income per year.

History has shown that the rate of savings increases during difficult economic times, as consumers begin to cut back on their purchases.  Correspondingly, savings typically decline during good economic times as is evidenced by the rate of savings falling below 1.0 percent before the last recession which began at the end of 2007.  Even though the savings rate has recently climbed to approximately 5 percent, it is far less than the savings in some years past.

Admittedly, it is difficult to save during times of inflation and job loss.  The fact of the matter is that each person only has a certain amount of disposable income, and when he or she has to pay more for everyday commodities, it cuts into the amount available for saving, making a bad situation even worse.

Making people feel more comfortable with their lack of savings has been access to credit, with some using credit not only as a convenience, but as a piggy bank.  “Credit replaced savings as the family’s safety net, with some arguing that savings was unnecessary since they could charge or borrow their way out of any unplanned event,” continued Cunningham.

Times are different now, and consumers know it, with the new normal for credit shaping up before our eyes.  Access to credit has diminished totally for some, while credit lines have been lowered for others, making reliance on credit as a rescue tool in an emergency not an option for many. 

Further, as the NFCC’s survey reflects, controlling debt has become paramount for consumers, with studies indicating that new purchases are more likely to be paid for with a debit card than credit, thus keeping personal debt at a manageable level and freeing up money for savings.

Consumers appear to have learned their lesson about over-spending.  Now they need to focus on the other side of the equation: saving.  The best use of the money that was previously going to pay off creditors is to begin or build up personal savings in the following five key areas:

Rainy day fund - covers the everyday life emergencies such as home or vehicle maintenance, insurance co-pays and deductibles, etc. 


Income replacement account - sustains you in the event of a job loss, major medical event, divorce, etc.


Downpayment for a mortgage – a significant downpayment will put you in a better buying position, as well as lower the amount you have to borrow


Known future expenses – plan in advance for upcoming major expenses such as education, vehicles, vacations, etc.


Retirement – start planning today to secure your tomorrow, as even small amounts of money invested over time can make the difference in how you live during your senior years

“In bad times, people save out of a fear of tomorrow, and in good times they spend as if there were no tomorrow,” said Cunningham.  “To turn this savings/spending cycle into financial stability, consumers should recognize the unarguable importance of savings and develop a systematic plan to meet their personal savings goals.”

If you need help getting started, reach out to your local NFCC Member Agency.  To be automatically connected to the Agency closest to you, dial (800) 388-2227, or to locate a counselor online go to www.DebtAdvice.org.  For assistance in Spanish, dial (800) 682-9832.

The August poll question and results are as follows:

Which is more important to you?

A.     Paying down debt = 89%

B.     Increasing savings = 11%

Note: The NFCC’s August Financial Literacy Opinion Index was conducted via the homepage of the NFCC Web site (www.DebtAdvice.org) from August 1 - 31, 2011 and was answered by 2,928 individuals.

Poll Reveals Consumers Committed to Retaining Cell Phone and Internet Service

When trying to save money, consumers choose to keep technology and cut back in other areas

Washington, DC – The June Financial Literacy Opinion Index poll hosted on the National Foundation for Credit Counseling (NFCC) website revealed that in order to save money, people are willing to give up eating out, shopping, fancy coffees and cable TV, but they remain very attached to their cell phone and Internet services.

When asked to select the last thing they would give up in order to save money, only one percent of the 3,148 poll respondents insisted on keeping their designer coffee, one percent couldn't do without online or catalogue shopping, four percent would have trouble eliminating eating out, while eight percent were reluctant to pull the plug on their cable TV.

By contrast, 32 percent said they would be least likely to discontinue their home Internet service, while the majority, 53 percent, would refuse to say goodbye to their cell phone.

“It appears that Americans love their technology and are determined to stay connected,” said Gail Cunningham, spokesperson for the NFCC. “However, they may still have the opportunity to save money in those areas by examining their current cell phone and Internet plans. People often have plans with bells and whistles they seldom use, and discontinuing such services can save a significant amount of money.”

The poll results indicate that consumers are making logical choices when determining where to cut back, as they elected to eliminate spending in the areas where the lifestyle change would be least noticed, thus increasing the likelihood of sustainability. For instance, they can brew coffee at home, prepare meals at home, and control their shopping. Giving up cable seemed doable possibly due to the many viewing options available online or via a cell phone.

It is not surprising that consumers are reluctant to part with their Internet service and cell phones, as the poll confirms that Americans consider these as must-haves. Computer use has become ingrained as a part of people’s everyday activities as they rely on their Internet access to, among other things, search for a job, connect with friends, research a project, trade stocks, for entertainment and to stay up to date on breaking news.

Today’s consumers may be reluctant to give up their cell phone, not only due to convenience, but because they have disconnected their land line in favor of their cell as the main source of verbal communication. Considering the capabilities of today’s smart phones, tech-savvy consumers have begun to rely on their cells to perform many of the same tasks as their computer.

“It is encouraging that consumers appear to have thought through their cost-cutting decisions, and have made wise choices,” continued Cunningham. “This level of awareness will not only help people ride out the difficult economic times they’re currently experiencing, but result in a more stable financial future.”

If you need help finding realistic ways to control spending, reach out to a trained and certified housing counselor through an NFCC Member Agency. To be automatically connected to the location closest to you, dial (800) 388-2227, or go online to www.DebtAdvice.org. For assistance in Spanish, call (800) 682-9832.

The June poll question and results are as follows:

In order to save money, the last thing I would give up is

A. My cell phone = 53%

B. Cable TV = 8%

C. Designer coffee = 1%

D. Eating out = 4%

E. Internet/catalogue shopping = 1%

F. Home Internet service = 32%

Note: The NFCC’s June Financial Literacy Opinion Index was conducted via the homepage of the NFCC Web site (www.DebtAdvice.org) from June 1 - 30, 2011 and was answered by 3,148 individuals.

Consumer Credit Soars On Largest Card Debt Jump In Three Years

Consumer credit rose by $5.08 billion in May, marking the eighth straight monthly increase, as credit card debt had its largest gain in three years, according to the Federal Reserve's monthly G.19 report.

Revolving credit, 98% of which is credit card debt, soared by $3.36 billion after declining by $876.7 million in April. It marks the biggest increase in credit card debt for any month since mid-2008.

The figures suggest a willingness to keep borrowing despite a tight job market and unstable economy. It's possible the rise is occurring as consumers facing limited job prospects turn to credit cards more often to pay bills. (emphasis mine)

Non-revolving credit, which includes categories such as student loans and auto loans, expanded by $1.7 billion in May after shooting up by $6.54 billion in April.

The total of all consumer credit outstanding in May reached $2.432 trillion, up from a total of $2.427 trillion in April.

Start when you are young… Credit Cents

Those first few years completely free from parental supervision and financial support bring some very exciting firsts. First apartment, first job, first budget . . . It can all be very overwhelming. With everything happening all at once, it can be hard to know what is best for your finances. Here are a few basics to keep in mind.

• Make a budget. If you've heard it once, you've heard it a thousand times, constructing a budget can be your greatest ally when it comes to managing your finances. Those first paychecks may inspire you to make rash spending decisions. Impulse purchases can throw you into debt, which is never a good starting point.
• Prioritize. While you're putting together your budget, it's important to prioritize your monthly expenses, and your debt. Bills–rent, utilities, etc–need to go first; those are costs that you cannot avoid. Next come any loans (student, car, etc.) or other debt repayment. For the sake of your credit score, it is crucial that you make your payments on time. And if you have credit card debt, make sure to pay more than the required minimum whenever possible, and always put any extra funds toward paying off the one with the highest interest rate. Consider paying yourself each month one of your necessary financial obligations each month; saving just $20 a month can make a huge difference.
• Ensure you're insured. Health, disability and life insurance are often offered through employers, so make sure you're covered for life's "in case" events. Recent health-reform legislation allows you to stay on your parents' health insurance until age 26. After that you're on your own. Make sure you fully understand and are signed up for the insurance policies most beneficial for you.
• Look down the road. It may sound ridiculous to be planning your life ten years from now, but having an idea of where you want to be can help you form a plan for your spending and saving today. Do you want to own a home? Get married? Have kids? Your credit score and savings have a tremendous impact on all of these milestones, and you don't want to be looking back thinking, "If I'd only had a financial plan . . ."

Need budgeting help? Already have more credit card debt than you can manage?

Contact our non-profit Consumer Credit Counseling or Homeownership Resource Center for FREE budgeting, credit card counseling, home ownership opportunities and foreclosure counseling. info@fsisc.org phone 800-232-6489

Family Services, Inc. is a non-profit organization with HUD certified and South Carolina licensed consumer credit counselors.