In its monthly online poll, the National Foundation for Credit Counseling (NFCC) asked consumers about their financial New Year’s Resolutions. More than 6,100 consumers responded as follows:
My Number One New Year’s Resolution for 2010 is to:
A. Decrease debt = 76%
B. Increase savings = 6%
C. Improve my credit score = 11%
D. Decrease my dependence on credit cards = 7%
Decreasing debt is certainly a worthwhile goal. However, seeing only six percent of respondents citing saving as a top financial priority is worrisome. Without adequate savings, a person is on a slippery financial slope. When the inevitable emergency occurs, resolution options are often limited to borrowing from friends or family, taking money from a higher payment priority such as housing, or charging the expense and adding to an already burdensome debt load.
Experts recommend designating 10 percent of each paycheck toward building a rainy day fund. At the end of a year, you’ll have a little more than one month’s income set aside which should be sufficient for most emergencies.
Squeezing even an extra 10 percent out of an already tight budget can often be challenging. The most effective way of finding hidden money in your budget is to track your spending for 30 days. Being able to see in black and white where your money goes allows you to make conscious decisions about your spending moving forward.
To help you track your spending, print and carry this Record of Daily Expenditures. Carry this form (or a simple notebook) with you and record every penny you spend—even if it’s only a soft drink from the convenience store, or a trip to the drive-thru at a fast food restaurant. Most people find that the simple act of recording their actions results in positive changes.
For more, watch the free Webcast titled Building Savings and Wealth or sign up for the free Webinar titled Make Your Money Count.
Portions of this content were provided by the NFCC. Money Management International is a member of the NFCC.