STANDING ON THE FISCAL CLIFF: CCCS Offers a Financial Survival Plan for 2013

(BALTIMORE, MD) – January began with a partial resolution to the fiscal uncertainty we’ve all faced the past few months. But the economic roller coaster ride we’re on isn’t over yet.  In the coming year, most of us will see our income reduced by about $1,000 due to a two percent increase in FICA payroll taxes, and Congress still has fiscal issues to resolve.  With these facts in mind, financial expert Deanna Booker recommends we all look for ways to conserve our financial resources, so we have enough money in our wallets to stay financially secure in 2013.  Booker, who serves as the Community Outreach and Communications Manager for local nonprofit Consumer Credit Counseling Service of Maryland and Delaware (CCCS), points out, “The start of the new year offers us each the perfect chance to take stock and take steps to get our financial house in order. Those who pass up this opportunity may regret it later, because a plan of action provides a crucial anchor in unsure times. It grounds you, so you’re better prepared to ride out unexpected economic setbacks.”

Booker, who has years of experience helping clients develop effective money management habits, recommends that consumers start by taking small steps toward financial stability.  “It all starts with a personal assessment,” she suggests.  “You have to know where you stand financially before you can develop strategies to get the most out of your money.  If you aren’t already living on a budget, it’s time to set one up. This serves as the cornerstone of your financial house.  If you already have a budget, take some time now to revisit it and see how things have changed over the past few months.”

Booker believes that budgeting is a basic skill anyone can learn.  “You have to know what you have coming in and going out to keep your financial house in order.  Otherwise, it can easily fall apart. Make a list of the income you bring in on a regular basis.  Then make a list of your monthly bills, and don’t forget to include items like insurance premiums that come due periodically throughout the year. Average these recurring expenses in as well.  Once you’ve added up your income and expenses, subtract your total monthly expenses from your net monthly income.  If you’re left with a negative balance, you’re living in the red and need to take steps to increase your income or reduce your spending to balance your budget.”

CCCS offers free, confidential assistance for those who want to learn how to budget. This past year, the agency helped almost 30,000 evaluate their finances and set up personalized budget plans. It also has an interactive budget worksheet and a self-paced online budgeting course on its website (www.cccs-inc.org).  These resources are available at no cost.

Booker suggests making budgeting a “family affair.” “If you have children at home, this is one way to teach them the value of a dollar.” She uses this approach with her own daughters. “My oldest just got her first job, and my youngest receives an allowance.  Budgeting is even more real to them now that they have money of their own to manage.”

Goal setting is another financial building block. “Without goals, it’s easy to get side tracked.  The objectives you work toward add focus and purpose to your financial plan.” To check if a goal is worth pursuing, Booker recommends thinking “S.M.A.R.T.”  Ask yourself, “Is this objective specific, measurable, attainable, realistic, and time bound?”  Also put some thought into how you’ll achieve it.

What if financial setbacks occur that upset your goal strategy? “Don’t panic and don’t give up.  Look for ways to modify your approach so it fits your circumstances.  For example, if you’re saving toward a vacation when the car transmission blows up, if you don’t have enough emergency funds available, you may need to redirect some of the money you’ve saved toward this repair.  But start back into saving for your vacation as soon as you can.  Patience, flexibility, and persistence pay off in the end.”

Booker also suggests consumers begin the year by organizing their finances. “If you don’t already have a system for tracking and storing your financial records, this is a great time to set one up -- especially with tax time right around the corner. Start a bill paying calendar or journal. This will help you stay on top of when things are due. Also pull out and review all your financial documents. Confetti shred those that aren’t needed and set up a practical filing system for those that are, such as statements from your bank, creditors, and mortgage holder. Once your filing system is in place, periodically go through and throw out anything that isn’t needed. If you’re technologically savvy, you can even scan and digitally save your records to save extra space.”

Booker cautions: “Store documents in a safe place.  Many records and papers can be kept in a centralized home file for easy access. Keep those that are most valuable --like your social security number, passport, and tax returns -- in a safety-deposit box or fire, water, and burglar-proof home safe.  Make copies of any record that you can’t afford to lose.”

If you owe balances on loans or credit cards or have accumulated new debt over the holidays, now is the time to develop a plan for repayment.  Booker asserts, “The more you owe, the more vulnerable you are -- especially in these uncertain times.” If you’re having trouble meeting your obligations, look for ways to cut back on expenses, so you can get back on track as soon as possible. Even small shifts in spending can help you free up the funds you may need to take control of your debt.  Consider downsizing your current cable and telephone packages.  Bring coffee to work from home instead of stopping at the local convenience store each morning. Booker also emphasizes, “If you aren’t able to handle your debt on your own, don’t wait. Call us now.” 

CCCS has a 47-year track record for helping people with serious debt problems get back on their feet.  The agency offers credit counseling by telephone or at local offices throughout the Baltimore area, on the Eastern Shore, and in Wilmington, Dover, and Claymont, Delaware.  During free, confidential sessions, its certified counselors help clients explore ways to reduce their spending, increase their income, and examine available repayment options. 

Some clients also qualify for CCCS’s debt management program.  Under this plan, they make a single payment each month, which the agency distributes to all their unsecured creditors.  According to Booker, “Clients appreciate the structure and security our program affords. While they’re in the program, they also learn tangible financial skills and receive resources that will help them long after they leave us.”  This past year, CCCS clients repaid nearly $70 million in consumer debt.

Booker concludes, “Nothing makes me more excited than when clients successfully repay their bills and are ready to leave our program more financially secure.  That’s the start of a truly happy, new year!”  If you need budget or personal finance advice, call CCCS for an appointment at 1-800-642-2227.  To learn more about what CCCS does, visit the agency website at www.cccs-inc.org. 

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Consumer Credit Counseling Service of MD & DE, Inc. (CCCS) is an accredited 501(c)(3) nonprofit agency that helps stabilize communities by creating hope and promoting economic self-sufficiency to individuals and families through financial education and counseling. CCCS MD State License #14-01