BOSTON (CBS) – According to a National Foundation for Credit Counseling (NFCC) survey, when asked if their personal financial problems were self-inflicted or the result of events beyond their control, the overwhelming majority of respondents (63%) admitted responsibility for their financial woes. The other 37% stated that some outside force, an illness, or a job loss had affected their situation.

To help consumers get on the right track for 2013, the NFCC offers a 12-step program.

Have a credit report review – Much of a person’s financial future depends on the contents of their credit report. Consumers are allowed one free report from each of the three major bureaus once every twelve months at Obtaining all three reports at once is a good idea if a major purchase is on the horizon.  If not, stagger the requests throughout the year to check for identity theft.

Know the score – The three digits that comprise the credit score are a major dictator of whether or not the lender will extend credit, and at what interest rate.  There will be a small charge to obtain your score, but it will be money well spent.  Since there are multiple scores, each with a different scale, be sure to understand the range of the score purchased.  Typically, a high score equals a low interest rate, saving significant money over time.

Reduce debt – Piling new debt on top of old is a red flag. Lock up the credit cards until they’re paid in full, and consider reaching out for help from a legitimate credit counseling agency sooner rather than later. Delaying action only makes the problem worse.

Commit to save –Without a well-funded savings account, life is lived on a very slippery slope, one that becomes treacherous with the next unplanned expense.  Starting small is better than not starting at all. Find extra money to dedicate to saving by putting all raises, bonuses, birthday checks, and any other windfall monies into savings.

Get financially organized – Create a personal financial center. It doesn’t have to be a fancy home office; it could be an accordion folder.  The point is to have easy access to all your financial stuff.  To stay on top of things, commit to visiting the financial center at least once per week. Place the originals of important documents such as a will or mortgage in a safe deposit box, and keep copies at home.

Avoid incurring late fees – Pay bills the day received if you can. Delaying could result in a late fee, a dinged credit report and a lower credit score.  Consider setting up online bill paying for all recurring bills.

Avoid paying overdraft fees – A receipt stuffed into the car visor isn’t simply being unorganized; it can be a costly habit. Many an account has been overdrawn due to neglecting to notate an ATM withdrawal or debit purchase. Record each transaction into the check register on the spot, and double-check by viewing the account online weekly.

Track spending for 30 days – Have everyone in the household who spends money participate in this eye-opening exercise.  Write down every cent that is spent, as it’s the small, miscellaneous expenses that often wreck the best of plans. At the end of the month, come together to review where the money went, making adjustments where necessary.

Create a realistic spending plan – A budget is not intended to be restrictive. Instead, it should be liberating, putting the earner in charge of how he or she chooses to spend their hard-earned money.  Make it too strict, and no one will stay on board.  Make it too lenient and it won’t accomplish anything.

Take advantage of free money – Contribute the allowed maximum amount to the retirement plan at work, or at the very least, meet the employer-matched amount. Not doing so is throwing away free money.  Also, inquire about the availability of Flexible Spending Accounts or Health Savings Accounts.  All of the above can lower taxable income.

Have an annual insurance check-up – No one wants to be over-insured.  Nor should they be under-insured resulting in an unpleasant surprise when making a claim. Make an appointment with an independent insurance agent and confirm that coverage is appropriate for each category.  Inquire about ways to lower premiums, and ask about any discounts for loyalty, good driving and the bundling of multiple polices.

Investigate refinancing the mortgage – Rates are still very low, meaning that refinancing can potentially save significant money over the life of the loan. Use online calculators to help compare the options.  Do not be tempted to extend the term of the loan, however, in order to get a lower monthly payment unless absolutely necessary to stay afloat.


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