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A National 501(c)(3) Non-Profit Organization
call: 1.800.763.1874 |
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CACC Moneywise Monthly Budgeting & Savings News You Can Bank On
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February 2010
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By now most people have either begun falling behind or totally given up on their New Year's resolutions already.
Whether it was losing weight or reducing debt, old habits die hard and we find ourselves falling back into the same old, unsuccessful routines. Or, we vowed to manage our money better in the New Year, tried doing some new things but got bored of it or just had other things to do that seemed more important, like watching TV.
Success, especially when it comes to personal Finances, comes to those who start with a good plan, set realistic goals, and who are vigilant over a long period of time. You did not get into debt overnight, nor, will you get out of debt in a week or two.
Savings grow over time. Investments grow over time. Debt gets paid down over time. Taking the long term, steady approach to reaching your financial goals is the best strategy to employ.
A great way to keep motivated is to look for, and celebrate, each small success. If your focus is only on accomplishing big things, you may be missing lots of small victories along the way. Some days you will see little or no progress but other days you will have great success and it is those days that will sustain you through the tough times when it seems you are not getting anywhere, you have a setback, or, your old habits seem to be pulling on you more strongly than ever.
Getting out of debt is a Marathon race for most people. And, like a long race, some people get off to a quick start while others start more slowly, but the goal is the same; To Finish! Along the way there are tough miles and easy miles. Fighting through the tough miles to the downhill miles takes commitment, discipline, and a strong desire to succeed. How bad do you want to get to the Debt Free finish line?
Remember, CACC Counselors are your financial coaches. If you need us we are here to help you keep moving toward the finish line!
Take Action! Review your Spending Plan and compare your planned expenses vs. your actual expenses in January. How did you do?
Thank you for choosing Consumer Advocates Credit Counselors as your credit counseling organization. We welcome your comments and suggestions for future issues. Please email education@caccdebt.org with your ideas.
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 Using Assets for a Financial Emergency
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You may have read about and been considering asking for a hardship distribution from your Retirement Savings Program.
What is a hardship distribution?
Some qualified retirement plans such as a 401(k) allow account holders to request a hardship withdrawal when they face financial difficulties.
The real authority on the subject and final word on whether income tax and penalties will be due is the IRS. According to IRS regulations, to qualify for this type of distribution, your hardship must represent an "immediate and heavy financial need" and the withdrawal must not exceed the financial need and be used only to satisfy the need.
It is important to understand that your plan may impose a suspension period on contributions following a hardship or any distribution. IRS rules do not allow you to repay a Hardship Distribution. During the suspension period, you may not be allowed to make contributions to the plan or any other plan maintained by your employer. Check your plan's hardship withdrawal material for more detailed information.
If your plan allows, your hardship distribution may be "grossed up" to include any amounts reasonably anticipated to be necessary to pay any federal, state, or local income taxes or penalties resulting from the hardship distribution.
Even if the hardship withdrawal is granted by the retirement fund's administrator, the reason for the withdrawal may still not meet IRS requirements and some taxes may become due. It is always best to research at IRS.gov as well as talking to the retirement plan's administrator as well as a CPA or other qualified, personal tax professional. In the end, it is your money after all. It may make the most sense to use some of it to reduce or eliminate your debt.
** For more tips, information, and resources on budgeting, saving strategies, ways to combat debt, and how to use credit responsibly, call Consumer Advocates Credit Counselors toll-free 1-800-763-1874.
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Get the most out of your Debt Management Program! ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
To get the most out of your Debt Management Program you must continue to be part of the process. Here are some smart things you should do to make sure that you are getting the maximum benefits from each and every monthly payment you make.
Never Miss a Payment
Once proposals are accepted and a monthly payment established, it is not in your interest to be late or miss a payment. This is a priority as it will not sit well with your creditors. Creating a good Spending Plan and sticking to it month after month will keep you on track and in good standing with all creditors.
Avoid incurring any more debt or applying for new loans
Your creditors will periodically check your credit report to find out if you have applied for more credit, and if you have, they may back out of the DMP. The best reason, however, to avoid taking on more debt is that doing so is counterproductive to your goal of becoming debt-free. Taking on additional debt will be a big setback for you and could make it impossible for you to continue in the DMP. Borrowing more money should be a last consideration at this time. If you feel the need to take out a new loan for any reason, call and speak to a counselor first!
Keep copies of your statements from your creditors
Keep all your statements at least until the debts have been completely paid off and you have received written confirmation of this from your creditors. This way you'll have evidence of your payments should any questions come up in the future..
Do you know someone who would benefit from money management
strategies and information? Please forward this email to them!
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A New Look for Credit Card Statements 
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Better late than never, Phase II of the Credit Card Accountability, Responsibility and Disclosure Act of 2009, aka the Credit CARD Act, will officially go into effect this month. The CARD Act is full of consumer protections that we all wish were in effect ten years ago before we got into trouble.
A major change is that warnings about making only minimum payments will appear prominently on each credit card statement. The warnings must show how much longer it will take to pay off an account and how much interest will be paid while just making minimum payments. The idea is to make it more clear how expensive and how long it will take to pay off debt with minimum payments.
This information is required to be placed in "a conspicuous and prominent location on the billing statement."
Watch for these changes on your next set of credit card account statements and be sure to call and clarify any questions you have once you see the information. The goal is to help you understand and manage your credit accounts better so use these new tools to your advantage!
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A Spending Freeze for Everyone?
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 President Obama has called for a Federal Spending Freeze for 3 years. During his recent State of the Union speech he mentioned struggling families who have cut spending saying, "families across the country are tightening their belts and making tough decisions. The federal government should do the same."
While many families have made some major cutbacks, either by choice or of necessity, many families have not done all they could do. Few families ever opt for a full spending freeze.
Here is a challenge for all of those readers who may have some room for additional expense cutting. How about trying a full family spending freeze for the next 30 days? No spending on anything except absolute necessities for the next 30 days.
This is an extreme measure and not easy to do, but the rewards are great for those who actually could stick with it for an extended period of time. The challenge would be to continue for several months or a year. Can you imagine the cash flow that would be available after a full year of doing without all extra spending? It would be a safe bet to say most people have no concept of how much extra money they'd have available because they have never done it before.
By taking a close and careful look at your Spending Plan (budget), finding the extra expenses, and adding up of all the costs of the "want to have" and "nice to have" items, you could estimate how much your monthly and annual savings on a strict spending freeze would be. Another safe bet would be savings of thousands of dollars a year for average families.
For those of you who already stopped all extra spending because you had no choice, don't miss the opportunity to keep track of the savings each month so that when things improve for you financially, and they will, you might be less likely to fall back into old, over spending habits if you have a real idea of how much money you can create by paying close attention to spending.
Will you take the challenge? Start a 30-day spending freeze starting today. Let us know how you are doing during the month and we'll report on some success stories in upcoming editions of this newsletter.
A Money $aving TIP
Consumers
lose billions of dollars each year on unneeded or poorly done car
repairs. The most important step that you can take to save money on car
repairs is to find a skilled, honest mechanic. Before you need repairs,
look for a mechanic who: -is certified and well established -has done good work for someone you know; -communicates well about repair options and costs Have a money saving tip that you'd like to share?
Send it to us for possible publication in this newsletter! education@caccdebt.org |
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The Cost of a Kiss
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According to the National Retail Federation, couples will spend less this year on Valentine's Day gifts.
The NRF survey reports that couples will spend an average of $63.34 on gifts for their significant
other or spouse. The average person will spend $103.00 on traditional Valentine's Day gift purchases this year,
similar to last year's $102.50.
But the spending won't stop there. Look at all of the other people who are on the gift list this year, and every year. The average person will spend $5.37
on friends, $4.29 on classmates and teachers, and $2.84 on co-workers. Do you really buy your coworkers Valentine's gifts??
The average person also says they'll spend $3.27 on family pets, up
from $2.17 last year. Spending on family members will remain the same at $20.94.
This example illustrates the importance of creating a very detailed Spending Plan (Budget). Even someone who spends a great deal of time on their finances probably left Rover's Valentine's Day gift out of the February Spending Plan. The more detail you provide in your monthly budget, the better you will be able to manage your finances.
Happy Valentine's Day!
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There have never been more Americans in financial trouble in our lifetime!
We need your Help! CACC is a non-profit, IRS approved 501(c) (3) educational and counseling organization. Our expenses and operations are supported through generous contributions from corporations and individuals like you. Will you please consider providing some support so that we can continue our mission? The donation you make today will help fund debt relief programs, education, and client services while providing help and hope to thousands.
YES, I'd like to help fund CACC's Debt Relief and Education efforts with a contribution of:
( ) $25 ( ) $50 ( ) Other $___________.
Please Mail your Donation to:
CACC Education Development
23123 U.S. 441, Suite 107
Boca Raton, FL 33428
Thank you for your generosity!
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Support CACC while you save up to 85% on your favorite Magazines! Now that's a Win-Win!
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CACC Workshops and Seminars 
As a non-profit Credit Counseling and Financial Education organization, CACC is dedicated to reaching out to the community. CACC provides financial education seminars and workshops at community centers, local organizations, and companies.
Popular Topics Include:
- Managing Money in Tough Times
- Creating and Using a Spending Plan
- Managing Debt and dealing with Creditors
- Financial Trouble signs and What to do Next
- Smart Buying Strategies
- Fighting Identity Theft and Financial Fraud
- Understanding Your Credit Report and Boosting Your Credit Score
- Creative Ways to Teach Kids About Money
- Finding More Money to Save
- How to Get Out of Debt
Ask about customized seminars for your group, staff, congregation, team, or club! Call 1 800-763-1874 or
e-Mail: mikes@caccdebt.org
Upcoming FREE Workshop Schedule
If you live in South Florida, join CACC Director of Education, Mike Schiano, on the first Monday of each month at the Broward County Main Library from 2-3pm and the First Wednesday of each month at the West Palm Beach Public Library from 7-8pm for FREE Money Wise Workshops.
February - Give Yourself Credit! Understanding Your Credit Report and Boosting Your Credit Score
March - Budgets are like Diets! Creating and Using a Spending Plan
April - Managing Your Way out of Debt!
May - Fighting Identity Theft and Financial Fraud
June - Creative Ways to Teach Kids about Money
Register to attend:
Broward County Main Library at (954) 357-7439.
West Palm Beach Public Library - (561) 868-7791
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Consumer Advocates Credit Counselors, Inc. is a 501 (c)(3) non-profit credit counseling organization providing credit counseling, financial education, and debt management services. Please visit our website at: www.caccdebt.org
Additional consumer resources:
National Drug Abuse Hotline
1 800 622-HELP
National Domestic Violence Hotline
1 800 799-SAFE
Suicide & Depression Hotline
1-800-999-9999
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'Til Next Month,
Consumer Advocates Credit Counselors, Inc.
Copyright ©Consumer Advocates Credit Counselors, Inc. 2009
Use of all or part of this newsletter allowed with proper attribution and link:
Source: Consumer Advocates Credit Counselors, Inc. www.caccdebt.org |
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