Managing Personal Finances in 2011

By April Lewis-Parks

It is the end of a decade and with a New Year comes new possibilities to forge a solid personal finance plan.  Incorporating positive change to get out of debt and live a less stressful life is the goal of many Americans as we tread into the second decade of the millennium.   We would like everyone to improve their personal finance situation and make it last! 

A new report from the American Bankers Association found delinquency rates on credit cards increased in the third quarter of 2010. Paying back loans was a struggle for many Americans.  Despite this negative news, many experts talk of an economic recovery, housing bounce back and improving employment rates. One good early indication of this positive trend is that Americans are reportedly looking to increase their personal savings and more employers are planning to reinstate 401(k) matches in 2011.

Americans set financial resolutions every New Year, but we would like to promote the idea of an All Year Resolution.  The average credit card debt is reported at over $7,000 per household and debt can be overwhelming and at times, depressing—so it is urgent that Americans take control of their debt problems and reach out for assistance with their personal finances. Regardless of whether you’re looking to save money, make your credit score better, or buy a house next year, people have to be prepared to get the help they need to be financially successful and at peace.

Tips for 2011 money management:

  • Consistently pay debts on time to establish good credit. A consistent payment history demonstrates “willingness to pay,” which is a key component to creditworthiness.   
  • Pay extra money toward the debt charging the highest interest rate. As soon as you pay off that debt, apply extra payments to the next highest interest rate debt. This is known as the snowball method.
  • If you have extra money from a bonus or gift, put at least half of the total toward an extra payment on your debt to accelerate payoff.
  • Review your credit card statements every month to make sure payments are properly applied.
  • Track expenses, spend wisely, and control spontaneous spending.

Remember in this New Year you can accomplish anything you wish as long as you are persistent, consistent, and passionate about achieving your goals.