Resolve to manage money better
Seven days into the new year and one friend claims she's already broken two of her resolutions.
Rather than starting the year feeling guilty, most experts suggest consumers back up and set reasonable goals. And there are some things that consumers can do to make this year better than last.
Let's start with a smart one that's sensible and offers immediate gratification.
"Use your gift cards," says Stephen Levins, executive director of the state Office of Consumer Protection.
Even if they're good for at least two years, Levins suggests consumers find any gift cards they've recently received and make a plan to use them before they get lost, forgotten or expire.
If you're feeling full up on material things, you can use the cards to buy gifts for others. (But that probably works best if you can do it without breaking the other resolutions about stressing less and simplifying more.)
On a practical but less fun topic, consumers should also be a little more cautious about investing in new ventures during difficult economic times, Levins said.
While tough times bring out the best in some people, they also can make some usually level-headed folks more vulnerable to scammers. "You have to really make sure you know who you're dealing with," Levins said.
And that can be true of mortgage-rescue scam companies who continue to prey on people who have fallen behind on their mortgages.
And be wary of so-called credit counselors, loan specialists, sweepstakes offers and lotteries. Levins advises extreme wariness whenever someone says you have to pay money to win money: "It's a huge red flag."
He suggests skepticism with most "you may already be a winner"-type offers.
"It's just a ruse to get people to part with their money," he said. And he adds that in the 20 years he's been helping consumers, "I've never seen anyone collect on a sweepstakes."
As usual, Levins advises consumers to look at the complaint database at the state Department of Commerce and Consumer Affairs Web site to help check out a business before you spend money.
"You really have to do your homework," he said. "It's the old adage: If it looks too good to be true, it probably is."
The U.S. government Web portal — www.usa.gov — offers other resolution assistance. Turns out that site keeps tracks of popular New Year's resolutions.
That's because the site also refers readers to other resources to help accomplish the resolutions. This approach may sound pretty dry, but the upside is that the solutions and tips aren't trying to sell you anything, and they have that common-sense ring.
For example, the Federal Trade Commission offers straightforward advice on managing debt: "If you or someone you know is in financial hot water, consider these options: realistic budgeting, credit counseling from a reputable organization, debt consolidation, or bankruptcy."
The www.ftc.gov site takes consumers through some fairly detailed scenarios that examine your level of debt, your level of discipline, and your prospects for the future.
Most experts suggest developing a budget. That allows you to take control of your financial situation with a realistic assessment of how much money you take in and how much money you spend.
And you don't really need a lot of special equipment for this one. Start by listing your income from all sources. Then, list your expenses that are the same each month — like mortgage payments or rent, car payments and insurance.
Next, list the expenses that vary — like entertainment, recreation and clothing. By writing down all your expenses, even those that seem insignificant, you can track where the money goes, identify the expenses that have to remain, then figure out if you are spending the rest on what you think should be the top priorities.
If you're struggling with debt, the FTC suggests contacting your creditors. Tell them why you've got financial troubles, and try to work out a modified payment plan that reduces your payments to a more manageable level. That's better than waiting until your accounts have been turned over to a debt collector.
The site goes on to detail what to do if you end up needing to hire someone to help straighten out your finances, and tips on getting out of debt and avoiding more problems.