Find financial health in ’09

Nobody needs to tell Gary and Irene Piazza how to weather a financial storm, but they have some advice for folks trapped in the worst economic downturn since the Great Depression.

The Town of Tonawanda couple were sailing along on his income as a plant worker and hers as a travel agent when he suffered a brain aneurism in late 2002. They suddenly had to get by on her paycheck, and by the time he returned to his job nine months later, were $27,500 in debt.

“When bills started piling up I tried making ends meet with credit cards,” Irene “Reenie” Piazza said. “It got to be too much.”

Staring at bankruptcy, with no obvious way out, the couple turned to Consumer Credit Counseling Service of Buffalo.

“We started them on a need-to-use budget. The first step: get rid of the credit cards,” said Kate Beck, the organization’s education coordinator. The Piazzas also enrolled in a financial literacy program that fit their circumstances.

It was a struggle, but by early 2006 they had regained their financial footing, and are cited as a success story by Consumer Credit Counseling. People seeking assistance can hear their story on a public service announcement recorded by the Piazzas that plays in the waiting room.

They’ll never be caught short again, even by an unpredictable event like sudden illness, Reenie Piazza said.

Rule No. 1 in her personal guidebook: “If you don’t need it, don’t buy it. Live within your means.”

Rules No. 2 and 3:

• “If you can’t make the full payment, always try to at least put something

toward the bill.”

• “Instead of going out, stick to home gatherings with family and friends. Do the cooking yourself.”

Coming from people like the Piazzas, who’ve been through the grinder and survived to tell about it, such suggestions might carry extra weight with anyone blind-sided by the current global economic crisis.

“Everybody is being impacted in some way, shape or form,” said Paul Atkinson, executive director of Consumer Credit Counseling. “They haven’t been punched in the nose like this in the past.”

Like the Piazzas, professional advisers have plenty of tips for staying financially upright. “You just need some tools,” Atkinson said. “Right after the first of the year is a great time to pick pick out a few and at least get started on the right foot.”

For example, Jesse Mecham, creator of “You Need A Budget,” recommends four rules for setting up a “living” budget:

• Stop living paycheck to paycheck. “Instead of living on what you currently earn, start living on what you earned the previous month,” Mecham advises.

• Give every dollar a job. “Every dollar you earn must be given a specific task. Money not given a job is wasted money.

• Prepare for rain. “Unexpected expenses can creep up anytime,” he notes. They should be taken into consideration “far enough in advance so you can stick to the budget.”

• Roll with the punches. “Developing and sticking with a budget can be difficult, but it is important. Make the needed adjustments from time to time to ensure success.”

In addition to budgeting, Scott Mitic of TrustedID suggests keeping sufficient cash reserves on hand — at least six months of income; saving by cutting unnecessary expenses; keeping track of your credit score by getting free annual credit reports from each of the big reporting agencies, Equifax, Experian and TransUnion; trying to prevent identity theft by keeping your Social Security number to yourself, shredding mail that contains account information or new credit card offers and changing your computer password at least monthly; and increasing building your investments through a diversified portfolio.

Other pros like Buffalo financial planner Amy Jo Lauber have some simple tips for cutting everyday expenses:

• Shopping for better deals on automobile and homeowners insurance. “If you have enough savings, consider increasing the deductibles in order to reduce premiums,” Lauber adds.

• Taking advantage of automatic savings like 401K payroll deductions. You won’t miss money you don’t see, she counsels.

• Considering taking part-time work to augment your income.

• Consolidating debt.

• Planning meals for the whole week, and shopping accordingly. Try to choose recipes that will yield both dinner and a brown-bag lunch the following day.

• Checking your pay stub to see if too much tax is being withheld. “If you’ve been getting a large refund, talk to your tax adviser about reducing the withholding. It’s put more income in your paycheck.

• Making use of free library services. Besides books and DVDs, branches offer seminars and free events for kids. “There are things to do that won’t cost you anything,”.

• Considering donating your time, instead of money, to charities.

• Creating a home energy checklist, starting with thermostat and water heater settings. Make sure the furnace has clean filters and see that doors and windows are weatherstripped.

Source :- Find financial health in ’09