Money Wise Tips for a Prosperous New Year

In addition to losing weight and quitting smoking, many people will also make a resolution to get their finances in order this year. Due to holiday spending and heavy debt loads, this may be more difficult than ever.

Consumer Credit Counseling Service of South Texas, a nonprofit financial counseling agency, is already seeing an increase in requests for appointments and educational materials. Kim Womack, director of education for CCCS, says the increase is typical. "This has traditionally been a busy time as people are anxious to start the new year off right. Many consumers don't have all the skills to manage their money effectively so they seek advice," said Womack. She adds that some consumers are also motivated because of overspending at Christmas or a looming IRS debt.

For serious debt problems, consumers should immediately stop credit use, contact their creditors and ask for payment assistance. Consolidating balances onto lower interest cards may also be an option. Do not let accounts become delinquent before asking for assistance or exploring other options, cautions Womack. Counseling is also advisable to determine the urgency of the situation and to help formulate strategies for better management of current and pending expenses.

CCCS offers the following hints for consumers resolved to having a more prosperous new year:

Establish a written spending plan and stick to it. Plan ahead for yearly expenses and save one-twelfth each month accordingly, in addition to saving for specific goals.
Spend smarter - take advantage of sales, cut down on credit card usage, avoid impulse buying, comparison shop for everything from groceries to insurance coverage.
Pay down credit card debt as soon as possible. CCCS recommends the "power payment method" - pay extra on the smallest debt until paid, then pay that extra amount on the next smallest balance, repeating this practice until all the cards are paid. Reduce the number of cards as accounts are paid.
Reduce your tax liability as much as possible. Explore all viable options.
Review spending and savings practices several times a year to determine where adjustments need to be made. Maintain records to assist you in assessing variances in spending and expenses.

Womack also urges consumers to contact CCCS for counseling or educational materials. "Saying we're going to get our finances in order is easier said than done. "It is hard to change habits overnight," says Womack. CCCS can offer people a lot of guidance, help and encouragement."

CCCS of South Texas is a national, nonprofit, United Way agency serving the Coastal Bend, Crossroads and Rio Grande Valley. Established locally in 1969, CCCS offers free budget and credit counseling, debt repayment plans and consumer education. For an appointment or additional information, contact CCCS at 1-800-333-HELP or visit their web site at www.cccsstx.org