One Crisis Away
3:24 pm
Thu January 9, 2014

Want A Financial Makeover? Here's What You Should Do And What To Avoid

Financial overhaul is a popular New Year’s resolution, right up there with starting a work-out regimen or changing your diet.

When you want to change your spending habits, where do you start? As part of KERA's One Crisis Away series, Courtney Collins talks about making a plan that actually works with a financial education coordinator, Leilani Lim-Villegas with the Texas Department of Banking.

Interview Highlights: Leilani Lim-Villegas on …

… Top Three Financial Must Do’s: The first recommendation I would have is for families to establish a rainy day emergency fund. That would be my first, No. 1 priority. The second recommendation would be to plan on saving and not spending a portion of your tax return money. And the third one would be to request your free credit report.

…Pitfalls To Avoid: Many families do not have a family budget or what I’d like to call a family spending plan. So families wait until the last minute to plan for big expenses or the holidays. So speaking of the holidays, you know it’s coming. The same gifts you purchased last month are at a discount right now, and the financially smartest families start early and there are many programs in the community like Christmas in July and the main concept is to plan ahead. Especially during the tax season, people are itching to buy big ticket items, a new car, a big screen TV. So instead maybe consider investing that money in your future, maybe by enrolling in a children’s college savings account or use a portion of your tax return to either pay your debt or your credit cards.

…The One Small Thing Everyone Can Do: You must first learn to accept the difference between your needs and wants. You may need a cellphone, but you may want an iPhone. You may need, let’s say, internet cable if you work from home, but is it really, really necessary to have all the 200 premium channels? So you see once you understand what you really need, downsizing on the wants can truly make a world of difference in your family finances.