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some text Allison Shirk
For more articles about personal finance see the 2018 Your Money Guide page

As the New Year unfolds and people set resolutions to hit the gym more or begin tracking calories, Latricia Schobert from Consumer Credit Counseling Service in Chattanooga said many others will also vow to start tracking their money.

The beginning of the year is undoubtedly the busiest for the nonprofit that provides financial literacy services under the umbrella of the Partnership for Families, Children and Adults. The end of January and early February is often when the first credit card payment of the year is due and when people begin to realize they overspent during the holiday season, according to Schobert, the director of Consumer Credit Counseling Service, or CCCS.

"Budgeting is kind of like being on a diet," she said. "You just need a little bit of advice and to track your spending to become self-aware about what you are spending money on."

The agency has some good tips for those with resolutions to get their finances in order this year. The average CCCS client is about 45 years old and makes approximately $65,000 a year, but clients can range from retirees on a fixed income to those making six figures who still need help with debt management, Schobert said.

"Life just happens to people," she explained. "They get into trouble for various reasons."

Schobert said counselors first ask clients to track their spending for 30 days, so they can see where all their money is going. If someone is eating lunch at a restaurant every day, then that might be the first expense to go.

The agency provides budgeting guidelines for clients, too. For example, a person should not spend more than 35 percent of their monthly income on housing costs, including utilities and taxes, according to the guidelines. CCCS guidelines also state that transportation costs should account for no more than 20 percent of the overall budget, debt should consume only 15 percent of a person's expenses, savings should make up at least 10 percent and all other expenses, like child care and groceries, should total to about 20 percent.

If spending more than the allotted amount in one category, then other categories need to come in under budget, Schobert said.

"People spend a lot of money on housing and a lot of money on cars," she said. "People don't like it when we tell them, 'You may have to sell this car and get something a little cheaper.'"

The biggest concern for the Chattanooga agency is clients taking out too much in payday loans and cash advances. The Family and Consumer Sciences Department at the University of Tennessee Institute of Agriculture provides online information for financial management and recommends learning all the facts of a loan before signing up. The department recommends using Bankrate's loan calculator, bankrate.com/calculators/managing-debt/annual-percentage-rate-calculator.aspx, to see just how much a loan will cost with interest over the years.

Whatever financial goals a person does decide to commit to, Schobert recommends keeping it small and not setting "lofty" goals at first.

"It's really just about having a plan," she said. "Keeping it small seems to work best."

Here are simple ways to help you budget:

Track all spending for 30 days.

Write down when all your bills are due. If several bills are due in one week, then speak with your bank, utility providers, etc. to try and get the date scheduled earlier or later in the month to ease the financial burden.

Set short-term, medium-term and long-term goals. Set an achievement date for each goal and figure the amount you'll need to save each month to reach that goal.

With every purchase ask, "Is this a need or a want?"

Calculate your net worth and liabilities.

Set realistic goals.

Download a savings and/or budgeting phone app to help stay on track, like Feed the Pig, EveryDollar or Mint.com.

Attend a budgeting/financial management class. Chattanooga Neighborhood Enterprise is hosting a free "Money School" on Sat., April 18. To register, visit cneinc.org/money-school.

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