ICFE eNEWS #16-01 - January 2016
View this eNEWS online
Did you overspend on Christmas and the Holidays?
What a way to have to greet a new year; facing a mountain of credit card
statements within weeks of Christmas.
The sad lament of more than a few consumers is: Now what do I do?
First things first, rein in the spending by making it harder for you to
There are ten initial steps to take immediately to begin the
1. Freeze credit cards and ATM cards in a glass of water in your
2. Get spending on a cash basis and make notes/keep receipts on all
purchases to help raise your
awareness of where your money is going, day in and day out.
3. Freeze your credit files. This is now available in all 50 states.
Freezing credit files will make it more
time consuming to open new credit accounts or make large credit-based
purchases. In the process
you will be sent a copy of your credit files.
4. Take some financial pictures of yourself. The big picture is your net
worth, listing the things you own
versus the things you owe. But don't stop there, determine how many
years you have been working
full-time and how much money you have earned during that time. Now, what
percentage of your lifetime
income (to date) is reflected in your net worth? 10%? 20%? 50%? 150%?
The close-up picture is your cash-flow, how money moves in and out of
your life on a monthly basis.
It is a list of all income received in a month and also a list of all
expenses during the same month.
The difference in the two amounts equals your cash flow, be it positive
(more income than expenses),
or be it negative (more expenses than income), or be it zero (monthly
income and expenses are equal). The
close-up picture will help in prioritizing monthly spending. The
cash-flow will also help identify spending
that may be hurtful to getting out of debt. Try to get as much extra
cash going to debt pay-down as possible.
5. Create a written spending-plan and implement it with the next
paycheck or the first of the month,
whichever comes first. The cash-flow exercise is the basis for the
spending-plan; all the leg-work is
done. The monthly spending-plans then become your financial roadmap. The
key is to follow it closely,
because within that spending plan will be the Christmas debt reduction
and, eventually overall debt
elimination. Printable one page spending plans are on icfe.info.
6. Look for ways to get a better value for your dollar. It may mean
doing things for yourself that you may
have paid others to do for you, such as lawn care, car washes, laundry,
and so forth. Comparison
shopping is another way to save money and get more value. Coupons and
rebates add value to your
dollar, especially at the grocery store where the average American
family spends 30 cents of every
7. Make it a family affair. Everyone can contribute to energy savings,
avoiding food waste, clipping
coupons and watching out for sales on things regularly purchased.
Everyone can become a comparison
shopper and look for better values. An over-spender is not just someone
who spends more than they
earn, an over-spender is also someone who pays too much for things and
the latter group is the majority.
8. Add to your income at the same time you are spending smarter. This
can be done by taking part-time employment,
selling things on the internet with eBay, for instance, perhaps
generating additional income
from a hobby, craft, music or language instruction, and tutoring, to
mention a few.
9. Get some visual reminders around your home and office about improving
spending. If ATM and some
credit cards must be unfrozen, then keep those cards protected in an
"ICFE Credit Card Sleeve.". View them here on ICFE.info.
10. Take the inter-active spending quiz here on ICFE.info. There are
two; one for looking at your spender's profile and the other is an
They both will help anyone gain some insight to their spending Practices
Good luck and Happy 2016.
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Paul S. Richard
President - Executive Director
Institute of Consumer Financial Education (ICFE)
ICFE - Institute of Consumer Financial Education -