OAKLAND (April 26, 2005) According to WestAmerica Bank, most Americans believe they have a better chance of winning the lottery than saving for financial security. Yet, if you want to be financially successful, budgeting is not an option. It must be made a priority because no one cares more about your money than you.
If counting pennies is not your thing, start by looking at the big picture. The experts at Consumer Credit Counseling Services (CCCS), a division of Money Management International (MMI), have identified the following top money wasters that that can ravage anyone’s budget:
Credit card interest. The average interest rate on a credit card is currently around 18 percent. Credit card interest charges are one of the most common ways consumers waste money, and should not be considered an acceptable part of any budget. Requesting cash in advance or payday loans is just as bad as accruing interest on a credit card balance.
Failure to manage your money. If you are not on top of your investment strategy or do not even have a strategy, it is time to take control. Simply stated, the people who understand interest earn it, and those who do not understand interest end up paying it.
Poor loan decisions. To quote Shakespeare: “neither a borrower nor lender be.” Just because you qualify for a loan does not mean you can afford the monthly payment schedule. People who take out loans such as 110 percent mortgages and 72-month car loans are setting themselves up for almost guaranteed failure.
Relinquishing control. Under no circumstances should you cosign a loan or lend money unless you are completely comfortable with the fact that you may never see your money again. Do not blend finances with a significant other until you have the legal protections that something such as a marriage might offer.
Not expecting the unexpected. At the very least, be prepared for periodic expenses such as auto repair bills and holiday gift buying. Ideally, you should also be prepared for medical debt, divorce, and a job loss. It is always best to be prepared, rather than caught off guard, by disaster.
Jeopardizing your future. Borrowing money from your retirement plan is never a good idea. This mistake exposes you to potential penalties and jeopardizes the rate of growth on your long-term savings.
Emotional spending. Shopping is not a recreational sport. Expecting “things” to make you happy does not work and never will.
“If you find that you are unable or unwilling to tackle the big issues alone, consider working with a trained credit counselor,” said Shirley Dean, education and community relations director for CCCS of the East Bay. “They can help you develop a strategy based on your unique circumstances.”
About Consumer Credit Counseling Services
Consumer Credit Counseling Services (CCCS) is a non-profit, full-service credit-counseling agency, providing confidential financial guidance, counseling and debt management assistance to consumers for more than 47 years. CCCS helps consumers trim their expenses, develop a spending plan and repay debts. Counseling is available by appointment in branch offices and 24/7 by telephone and Internet. Services are available in English or Spanish. To learn more, call 800-762-2271 or visit their Web site at www.moneymanagement.org.