Americans have become accustomed to living a lifestyle accompanied by debt. The negative side effects of debt have been minimized to a mere inconvenience, something to be dealt with at a later time. In fact, according to figures from the Federal Reserve, the total U.S. outstanding consumer debt was $3.33 trillion as of January 2015. This figure includes car loans, student loans and revolving debt, but not mortgages.

“Sound and responsible financial management starts with facing the realities of our individual financial circumstances,” said Scott Smith, personal finance expert and president of CreditRepair.com. “Truthfully evaluating our income level, debt obligations, spending habits, savings habits and future financial goals will get you started on the right path to living a responsible financial life.”

Smith recommends avoiding the following self-deceivers:

1.  I don’t know what my credit score is, but that’s okay. I’ll only need it when I decide to buy my next car or finally purchase a new home. It’s very important to know your credit score and responsibly manage it in every situation in life. Credit scores are not only used for securing a loan, but also for insurance pricing, job applications and rental agreements.

2.  I’ll just take a little from my savings account, but I’ll pay it back next month. Don’t borrow against yourself. Having an established savings plan is very important in every stage of life. If a circumstance comes up that demands you pull funds from your savings plan, make sure to get back on the savings train as quickly as possible.

3.  Investing is too complicated and besides, only the rich get richer. Most of the time the “rich get richer” because of their discipline. Investing and saving is important for everyone, regardless of their current financial situation.

4.  Maybe if I turn my voicemail off the debt collectors will stop calling. Dealing with debt collectors can be very frustrating and sometimes even intimidating, but consumers do have rights protecting them and debt collectors have laws that govern their ability to pester you.

5.  I deserve a break. I’ll just charge my vacation and pay it back later. Although circumstances sometimes arise that require the use of credit to cover unexpected expenses, those situations should be minimized as much as possible. If credit card debt is incurred, pay it off as soon as possible. The interest charged is a serious penalty and is not worth the instant gratification that a vacation or expensive pair of shoes may bring.

The bottom line: self-improvement is a tall order, but making excuses for poor financial judgment will do nothing to improve your life. Focus on ways to enhance your financial situation now. Your future self will thank you.

For more tips on managing your money, or your credit, visit www.CreditRepair.com, a site that empowers every individual to achieve the credit scores they deserve and enjoy a lifestyle of greater opportunity.

Photo courtesy of Getty Images

*FF

The post Financial Fibs: 5 Lies to Stop Telling Yourself appeared first on AKAMom Magazine.

As more Americans make strides towards responsible spending and debt management, there are still ways to improve the control of family finances.

According to a survey recently conducted by Bank of America, which asked respondents about their credit card usage, balance and rewards, less than half of cardholders always pay their entire credit card balance. With more than half of individuals carrying credit card debt, Jason Gaughan, card products executive for Bank of America, said to think about personal spending before taking on a credit card.

“Credit cards provide consumers an efficient and protected way to make purchases,” said Gaughan. “They are more convenient than cash and they are incredibly useful in an emergency. The key to successfully managing your credit card account is to understand your budget and stick to a plan that works for you when borrowing. You want a card with a rewards program that fits your lifestyle and how you manage your finances. If you typically carry a balance, look for a card that has low interest and reinforces good payment practices.”

Along with these practices, there are other ways to promote good spending and personal finance habits, such as:

Limit Number of Credit Cards

According to the survey, three out of 10 respondents carried four or more credit cards. Limiting the number of cards you own can help limit your spending and increase the likelihood you can pay above the minimum balance. Before you start cutting up your plastic, remember having more than one credit card can have merits. If you need money for an emergency, the immediate buying power of a credit card can be a lifesaver. Try a card with no annual fee and a generous credit line to cover unexpected expenses. One idea is to have three cards: one in a safe place at home for emergencies and two with you at all times.

Reap the Rewards

With so many rewards programs available for credit card holders, it’s important to do your homework so you can cash in on things your family really needs. While some credit cards will offer rewards to use at your favorite hotels and airlines, others will give you special discounts for the purchases you make on a frequent basis. The most popular of these programs is cash back for spending. Some cards, such as the BankAmericard Cash Rewards credit card, let you earn more cash back where you spend the most money, like gas stations and grocery stores. The BankAmericard Better Balance Rewards credit card helps customers responsibly manage their credit card balance. Whatever rewards you are seeking, there is likely to be a card suitable for you.

Track Spending Habits Now

If you’ve been lax about keeping track of your spending, take the first step towards tracking as soon as possible. Include info on where you spend, when you spend and how much you spend. Making note of all of those little purchases — a cup of coffee here or a gift store trinket there — will help you see how quickly they add up. Whether you’re the old-fashioned, pen-and-paper type, or if you prefer a more modern, digital form of tracking, the importance is in the act itself.

Evaluate All Debts

Many carry debts beyond credit cards, including student loans, car payments and mortgages. While some may consider these types as necessary debts, it is important to keep track of the balance due for each as well as the interest rate you are paying. According to the survey, when respondents were asked what they would do with $1,000, nearly half (44 percent) revealed they would pay off debt. Evaluate your debts and decide which ones have the highest interest rates. Making it a priority to pay down these debts first will save you more money in the long run.

Create a Budget

It’s never too soon to put yourself in control of your money and stop letting it control you. A budget will give you financial peace of mind and it can help you stretch the income you have. First, write down the financial goals you want to achieve in the next few years and the ones you want to accomplish for the long term. Then, gather all of the purchasing information for the household and categorize each type of spending. Divide your expenses into fixed expenses (those that stay the same from month to month, such as a mortgage payment or cable television bill) and variable ones (those that may change, such as fuel bills or entertainment). Be sure to also set aside some money for personal savings and an emergency fund. Once you’ve calculated your income and expenses a month ahead of time and set your budget, you can focus on the most important part — adhering to the plan. Find ways to decrease spending. Adopt just one new way of trimming expenses each week and you’ll find your overhead shrinking fast. Though you may not be on-point every month, the simple act of tracking and communicating your family’s finances will be a huge step forward in your quest towards responsible spending.

For more information, visit www.bankofamerica.com/creditcard.

Feature photo courtesy of Getty Images

The post Simple Ways to Improve Personal Finances appeared first on AKAMom Magazine.