Columbia (PRESS RELEASE – January 11, 2010) — There is no doubt that 2009 was a rough year for many Americans. Consumers saw record high unemployment, credit lines cut and an increasing number of debt repayment delinquencies. One positive statistic was that in 2009, consumers saved more than ever — reaching a personal savings rate high of 6.4 percent in May. This is the highest figure since 1993, according to the Department of Commerce’s Bureau of Economic Analysis.
“Consumers have been able to save because they have been practicing frugality,” says Jenny Realo, executive vice president of CareOne Services, one of the largest debt relief service providers. “However, being frugal isn’t enough to get financially on track in the New Year. Consumers need to also pay down debt sooner and begin building an emergency savings cushion.”
To get started, CareOne Money Mom Lori O’Donnell advises consumers to have a plan in place to monitor spending and tackle some of the biggest expenses, including major bills, coming up in the New Year.
Make your finances a priority this year. You might have spent the last year buying as you needed something, but make it a goal this year to keep your spending in check. Make it a habit to write down purchases as you make them.
Set your short- and long-term financial goals. It’s always important to know what you have, but having specific goals can serve as motivation to spend less and save more. For example, start saving and budgeting now for your family’s summer vacation.
After you’ve set your goals, CareOne financial coach Suzanne Cramer says it’s time to take action. Start with evaluating your spending over the last three months.
Evaluate how you’re currently spending. Group your spending habits by categories that represent your needs and wants. For example, separate out how much you’ve spent on your mortgage or rent, food, transportation, entertainment, and so forth. Add up costs under each category and you’ll get an idea of how you’re spending and where you can probably cut back.
Create a budget. Now that you know your spending habits, identify where you can cut back so you are only spending on what you need. Create a budget that works for your income that allows you to pay down debt and still save money.
CareOne financial counselor Rob Taylor says your current bills are a good place to start when looking to cut unnecessary spending.
Read the fine print of your credit card bill. With just a few weeks before the Credit Card Accountability, Responsibility and Disclosure (CARD) Act goes into effect, credit card issuers are issuing new terms and policies — not to mention new interest rates. Make sure you keep and read all those little pieces of paper that come with your next credit card statement. Otherwise, it could cost you.
Review spending on personal items. While it’s nice to have cable and a cell phone, do you really need them? If you want to keep them, consider what you can cut from those bills. For example, limit your text and video messaging package. Also, do you have to have all the movie channels included in your cable or satellite package? Many TV shows are available on DVD now; consider canceling your cable or satellite service and pick up a subscription to a movie rental service, such as Netflix, instead.
The same ideas also apply to small business owners. Entrepreneur and MyCareOne community contributor Marci De Vries says you can cut the costs of running your business by applying personal savings tips to your work life.
Evaluate revenue from last year. Check last year’s revenue for patterns that may apply to this year. For example, did you do more work during certain months or weeks? Knowing this can help you prepare the resources you need at those particular weeks or months and cut back during other times.
Write it down. The best way to know what you can expect in the upcoming year is to list all current jobs and work orders that will extend into 2010. List revenue by month so you know what to expect in the coming months and subtract hard costs — salaries, cost of materials, rent and utilities. You will then have your forecasted revenue that you can use for budgeting other items, such as new equipment and marketing.
Clarky Davis, The Debt Diva, CareOne’s personal finance expert says don’t be afraid to be honest with yourself and your friends when it comes to your finances. Know when to say no to an impulse buy — even if the savings are tempting. Also, even if many people don’t openly talk about finances, let your friends know why you can’t go out for that meal.
Share the wealth. Find activities that you and your friends can do at home — and for less. Instead of going out to dinner, have a potluck. Invite everyone over to watch a rented classic movie instead of spending money at the theaters to see the remake.
Get help. If you find cutting back on your lifestyle is still not helping you to pay down debt and start an emergency savings, get professional help. Many credible credit counseling agencies will offer their services for free and can help you walk through steps to financial success. If counseling is not enough, they will be able to provide you with legitimate and meaningful options.
“We encourage our customers to take this time to evaluate spending habits and make changes so they can pay off debt more quickly and start saving,” says Realo. “The MyCareOne community is a great place to get started.”
For more ways on how to get financially on track in the New Year and for tools to help you get there, visit www.careonecredit.com or the MyCareOne online community. Consumers can ask questions and provide personal experiences on managing finances or staying debt free. They can also get valuable feedback from one of the twelve active community blog contributors.
About CareOne Services
CareOne Services was formed in 2002 to provide consumers with multiple solutions to complex money problems. CareOne Services Inc. boasts a unique Financial Fitness Center that examines each consumer’s individual financial situation and develops a personalized solution to help the consumer get out of debt and strengthen his or her financial footing.
CareOne Services has helped millions of customers successfully overcome financial instability and continued giving them the confidence to manage their money successfully. CareOne takes a holistic approach in assisting customers to manage their debt, looking at an individual’s situation and creating a solution that is achievable and works. CareOne does not offer to change or improve an individual’s credit score. CareOne goes beyond providing the standard debt payment programs, helping consumers address day-to-day life issues that are the result of being in debt along with free educational tools online.