Mechel Glass, Director of Education for CredAbility, offers tips and tools for consumers that will help them take charge of their finances and improve their financial outlook:
Take advantage of low interest rates: The Federal Reserve has pledged to keep interest rates low for at least the next two years. Consider purchasing a home, refinancing your current home — particularly if have an adjustable rate mortgage — or buying a car.
Raise 401(k) contribution by 1 percent: As the economy improves, investment returns may improve. Instead of spending more money, consider investing an additional 1 percent of your income in your 401(k).
Nurture your credit score: Paying your bills on time and paying more than the minimum amount will help improve your score. Even if you are not purchasing a car or a home in the near future, your credit score is being used to determine many things such as deposit for apartments, insurance, even when purchasing a cellphone.
Track every dollar you spend for 30 days: If you don’t have money left at the end of each pay period, or you can’t save money, it’s time to start tracking it. For just 30 days, write down every penny you spend. Review this list for expenses that can be reduced or eliminated. Small changes can add up to big savings and can help you reach your goals more quickly.
Save $10 a week: Even if you think you are living paycheck to paycheck, it is possible for you to save money. You can save as little as $10 each week just by making simple changes.
To find more information about CredAbility credit and financial counseling courses visit www.CredAbility.org.
A widespread lack of financial literacy has been at least partially blamed for the recent recession.
Many Americans weren’t really aware of what they were getting themselves into when they signed subprime mortgages for their houses, analysts have said, only to later find themselves unable to keep up with the payments.
“The financial crisis we’re hopefully emerging from was in part from people honestly not knowing what they were getting in to,” said John McCosh, a spokesman for CredAbility, a nonprofit credit counseling agency.
April is Financial Literacy Month, and organizations like CredAbility are trying to raise awareness of education opportunities to improve American’s financial planning.
“What we’re trying to do is draw the attention of responsible budgeting, a spending plan and setting aside money for the future,” McCosh said.
CredAbility is a national organization with headquarters in Atlanta. Education courses with the organization are held regularly in Gainesville. The organization offers courses on a wide-range of financial topics including household budgeting, avoiding debt and finding a mortgage. About 56 percent of Americans don’t keep household budgets according to a 2011 survey by the National Foundation for Credit Counseling. About 33 percent of those surveyed also reported that they did not have emergency savings either.
Hall County residents tend to be “at the opposite ends of the pole” when it comes to financial literacy, said Phillippa Lewis Moss, director of the Gainesville-Hall County Community Service Center. The center refers some of its clients faced with financial questions to CredAbility.
“We really have two extremes in our community,” she said.
Many of them are very financially savvy when it comes to spending, investing and saving, she said.
“On the other end, we have some with skills that are so minimal that they don’t even have a savings account,” Moss said. “Financial planning is going to be more important for this generation than it ever has been."
So where does that gap in financial knowledge come from?
“The vast majority of us learn through our parents,” he said. “If they have bad habits, that tends to be passed down through the generation.”
McCosh points out that many high schools don’t teach financial skills before students graduate. So education largely comes from parents.
When CredAbility runs its bankruptcy education course, he said the most common response from students is “I wish they taught this information in high school.”
CredAbility isn’t the only organization aiming to the level of financial awareness. Many local nonprofits, including Gainesville’s Action Ministries, make financial education — particularly with the emphasis on creating a budget and putting away savings — a part of the emphasis on helping those in need.