Department of Financial Institutions
In 2010, Take Control of Your Money
FRANKFORT, KY (Dec. 29, 2009) – In addition to improving your physical health, in 2010 you might consider improving your financial health as a New Year’s resolution.
The Kentucky Department of Financial Institutions (DFI) encourages consumers to create or revise a budget, control the use of debt and save for the future, starting in 2010.
“The New Year is often a time of reflection, where we look to see if there are aspects of our life that we can improve,” said DFI Commissioner Charles Vice. “Taking time to review your finances can benefit you more than just monetarily – it can give you peace of mind as well. It’s important to invest in your own future and to manage your credit – and your bills – wisely.”
The following are five areas to consider when reviewing your finances:
1. Create a budget – Budgeting is about choosing how to use your money. In a successful budget, your income should exceed all your expenses, including bills, credit card purchases and cash purchases. For at least a month, write down everything you spend money on – you might be surprised at how pocket change purchases can add up.
2. Review your credit report – The official Web site to obtain your free credit report is www.annualcreditreport.com. You can get a free report every 12 months from each of the three nationwide consumer credit reporting companies: Equifax, Experian and TransUnion. To request your credit report by phone, call 877-322-8228. To keep your credit clean, don’t borrow more money than what you need and make payments on time. If possible, make more than the minimum payment. And always be aware of fees and charges.
3. Pay yourself first – It’s easier to save when you set the money aside before paying your other bills and spending on other wants and needs. Save between three and six months worth of your expenses in a more liquid account – such as a savings account, certificate of deposit or money market account – in case of emergency. Any additional money you save could earn you a higher interest rate in a retirement or investment account. It pays to start saving early. With compound interest, a person who saves less starting from a younger age will have more money at retirement than someone who invests later in life.
4. Check before investing – Understand that there are no guarantees in investing. That’s why it is important to research your investments and make sure you understand the terms and the products. Also it is important to make sure the investment and the person selling it are licensed or registered in Kentucky. Call DFI to check at 800-223-2579.
5. Be prepared – It is a good idea to have cash on hand in case of emergency or when traveling. Although credit and debit cards are convenient, you should be prepared in case power goes out or the cards are lost or stolen.
“DFI is committed to providing financial education and promoting awareness about the importance of saving, investing and making wise financial decisions,” said Vice. “This year, examine your budget and see if you can increase your contributions to your own savings and retirement accounts.”
For more information on how to save, invest and avoid fraud, visit www.kfi.ky.gov/public/invest.htm. You also can get help with credit management at www.kfi.ky.gov/public/credit.htm.
DFI is an agency in the Public Protection Cabinet. It supervises the financial services industry by examining, chartering, licensing and registering various financial institutions, securities firms and professionals operating in Kentucky. DFI’s mission is to serve Kentucky residents and protect their financial interests by maintaining a stable financial industry, continuing effective and efficient regulatory oversight, promoting consumer confidence, and encouraging economic opportunities.