The recent National Foundation for Credit Counseling (NFCC) online poll allowed consumers to select their greatest financial regret. Of more than 2,200 respondents, 53 percent indicated that habitually overspending was what they regretted most.
Overspending far outweighed other financial concerns such as inadequately saving (18 percent), insufficiently preparing for retirement (14 percent), not having bought a house (10 percent), or having bought a house (five percent).
“Although most people have financial regrets, it is
important to not dwell on past mistakes,” said Gail Cunningham, spokesperson
for the NFCC. “Instead, look forward and
take action by constructing a plan that recognizes the realities of the
situation, repairs financial damage, and moves in a positive direction toward
financial security.”
·
Set
financial goals – Both short and long-term goals provide a financial
framework and create a vision that keeps spending on track. Put the goals in writing and display in a
prominent place. Have sound reasons for
establishing each goal, and when necessary, sound reasons for abandoning them.
·
Create a budget
– A budget is the cornerstone that a sound financial future is built
upon. Without it, danger signals are
missed and spending can easily spiral out of control. Get started by utilizing the financial
worksheet on the NFCC website at http://www.nfcc.org/FinancialEducation/monthlyincome.cfm.
·
Become a
track star – At least once every six months, track your spending by writing
down every cent spent for 30 days. This
exercise will reveal any leaks and provide an opportunity to adjust spending to
best meet objectives.
·
Be
financially organized - Create a cash-flow calendar, writing down all
sources of income on the anticipated pay date.
Next, record which bills are to be paid out of each check. If there is not enough money to satisfy all
obligations during one period, call the creditor and request a due date
change.
·
Don’t
wait to automate – Setting up automatic bill-paying provides protection
against skipping a payment or paying late, both of which can result in a dinged
credit report, a potentially lower credit score, and a late fee.
·
Review
your credit report – A credit report is a reflection of a person’s
financial track record, and is the basis of the credit score, making it a
must-read, particularly for those rebuilding credit. Consumers are allowed one free credit report
every 12 months from each of the three bureaus.
To access this free report, go to www.AnnualCreditReport.com.
·
Build a
high credit score – A high credit score equals a lower interest rate on
loans and credit cards. For a higher
score, put an emphasis on paying bills on time, not utilizing more than 30
percent of available credit, creating a mix of credit lines, not applying for
more credit than is necessary, and responsibly managing credit over time.
·
Realize
that life happens – Life is filled with the unexpected, with the unplanned
expense always occurring at the worst time, wrecking the best of budgets. Guard against this by creating a financial
safety net. Even small amounts of money
consistently deposited into a rainy day savings account can create enough of a
cushion to make it through most short-term emergencies.
·
Know that
tomorrow will come - Even if retirement is a long way off, that’s no reason
to ignore planning for it. Knowing that
time is money’s best friend, provides the smart young investor a very long
window of opportunity to turn a small sum of money into a fortune.
·
Become a
financial adult – This may involve making hard choices, changing attitudes,
behaviors, and lifestyle, but it is unlikely that financial decisions made on
auto-pilot will result in a smooth landing.
Be financially mature by understanding the nuts and bolts of personal finance,
and acting on that knowledge.
The actual May poll question and
responses are as follows:
My
biggest financial regret is that I…
A.
Habitually overspent
= 53%
B.
Inadequately saved =
18%
C.
Haven’t bought a
house = 10%
D.
Bought a house = 5%
E.
Haven’t sufficiently
prepared for retirement = 14%
Note: The NFCC’s June Financial
Literacy Opinion Index was conducted via the homepage of the NFCC Web site (www.DebtAdvice.org) from June1 - 30, 2012 and was answered by 2,205
individuals.
The National Foundation for Credit Counseling (NFCC), founded in 1951, is the nation’s largest and longest serving national nonprofit credit counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services. NFCC Members annually help more than three million consumers through close to 750 community-based offices nationwide. For free and affordable confidential advice through a reputable NFCC Member, call (800) 388-2227, (en Español (800) 682-9832) or visit www.nfcc.org. Visit us on Facebook: www.facebook.com/NFCCDebtAdvice, on Twitter: twitter.com/NFCCDebtAdvice, on YouTube: www.YouTube.com/NFCC09 and our blog: http://financialeducation.nfcc.org/
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