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Don't neglect your savings this New Year

Piggy Bank

By Jessica Horton, Copywriter

According to the December poll hosted on the National Foundation for Credit Counseling (NFCC) website, 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 top goal.

While that statistic could appear to be a warning sign of future trouble, it’s important to keep in mind that the use of credit is not the problem. It is the misuse of credit that leads to financial distress for many Americans.

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 of increasing their credit score, which was the top resolution chosen by 24 percent of respondents.

While decreasing debt is always a positive, consumers should not neglect savings, yet that is exactly what respondents appear to be doing. In fact, only eight percent of respondents 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 NFCC’s 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 with 62 percent in 2011.

The second largest year-over-year difference involved improving their 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.

While the survey reflects that consumers recognize the importance of achieving financial wellness, and acknowledge that paying down debt is necessary, the low priority placed on saving for the future is troublesome.

So as you begin the New Year, remember that a well-funded emergency savings account is essential to any good money management system. Savings can be your parachute when periodic living expenses or unexpected emergency expenses push you over the edge of your budget. Additionally, savings can help you reach your future financial goals.

The December poll question and answers are as follows:

My No. 1 financial New Year’s resolution for 2012 is to:

  • Decrease debt: 62 percent (December 2010 poll: 69 percent)
  • Increase savings: 8 percent (December 2010 poll: 7 percent)
  • Improve my credit score: 24 percent (December 2010 poll: 18 percent)
  • Decrease my dependence on credit cards: 6 percent (December 2010 poll: 7 percent)

The NFCC’s December Financial Literacy Opinion Index was conducted via the homepage of the NFCC website (DebtAdvice.org) from Dec. 1 to Dec. 31, 2011, and was answered by 2,319 individuals.

Money Management International is a member of the NFCC. The NFCC is the nation’s largest and longest serving national nonprofit credit counseling organization. NFCC Members annually help over three million consumers through close to 800 community-based offices nationwide. 

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Slim down while keeping your wallet nice and fat

Keep your resolution to trim down without breaking the bank

If you are like most people, your resolutions for 2012 include improving your waistline and your bottom line.

As a matter of fact, according to a 2011 survey, the two most popular New Year’s resolutions are to get out of debt and to lose weight.

While most people agree that the end results are worth the effort, losing weight can sometimes take a toll on your pocket book, especially when it comes to purchasing expensive gym memberships or gym equipment.

Rather than breaking the bank while trying to trim down your tummy, the experts at Money Management International (MMI) offer the following tips to help you lose weight while keeping your budget in tip-top shape:

Budget for the expense. Whether you’re planning to join a gym, purchase workout equipment or buy aerobics DVD’s, you will need to budget for the expense. Review and updated your current budget to ensure that you can handle the extra costs.

Research your options. An exercise program doesn’t have to be expensive. Local gyms offer month-to-month memberships and special rates through corporations. Your local YMCA may also be able to assist with a low cost membership. If all else fails, recruit a couple of workout buddies and meet at your local parks and recreation centers.

Turn on the TV. You can find exercise tapes on everything from yoga and step aerobics to salsa dancing and kick boxing at your local library.

Shop re-sale or garage sales. Rather than purchasing brand-new exercise equipment, check your local paper or online listings through Craigslist or eBay for equipment that is gathering dust in someone else’s home. Check with local sporting goods stores and gyms to see if they may be selling demo equipment and older models at a lower price.

Join a league. Group activities through community centers, churches and work such as bowling, softball, volleyball, soccer and flag football offer a great way to exercise and stay fit while having fun with your friends.

Finally, when adjusting your spending plan to accommodate your fitness program, don’t forget about shoes and clothing; training classes and materials; and vitamins and supplements. Making these expenses part of your everyday budget can help remove financial stress as an obstacle to your success.


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About Money Management International

Money Management International (MMI) is a nonprofit, full-service credit counseling agency, providing confidential financial guidance, financial education, counseling, and debt management assistance to consumers since 1958. MMI helps consumers trim their expenses, develop a spending plan, and repay debts. Counseling is available by appointment in branch offices and 24 hours a day, 7 days a week by telephone and Internet. Services are available in English or Spanish. To learn more, call
866.530.9869 or visit MoneyManagement.org.

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