A Penny Saved Is A Penny Earned:ey (little by little).

By not spending money, you are saving money (little by little).

Money is an interesting thing. When you have it, the present feels calm and the future looks clear. When it threatens to disappear it shakes you to your core: Where will you be and what will you do? And yet, the money you have now represents only your past: what you have been given, what you have spent or whether your investments have succeeded.

As we close out one of the most challenging years that many consumers have faced in their lifetime, we look forward to 2010 as though “it could not get any worse?” Many of you have succeeded by controlling spending, creating a budget, saving and understanding where money comes from and where it goes. Unfortunately, others have not been so fortunate to realize the importance of sitting down and putting their finances to paper.

This article is written in attempt to simply get your thoughts directed towards your finances and more importantly credit card debt and use. If, during this reading it makes you wonder; what is my credit card debt in relation to my gross income? How about my house payment ratio to monthly income? Is our credit card debt less than last month, six months ago or even a year ago? If so, your credit union has created a Financial Wellness packet that will create a roadmap to make it easy for you to put your finances to paper.

Consumer culture is constantly promoting a borrow-to-buy society, images of what life is supposed to be like. Universal commercial messages bring you to believe “you deserve this,’ “you need this,” you will be happy if you buy, borrow, consume, own, drive, play or eat whatever the advertised product is. Keep it real – “not how it should be, how it is.”

Our finances, like a sailboat in a perfect storm; we live in an ocean of consumer opportunity, our sails catch strong winds of marketing, advertising and peer culture, the keel represents our values and skills that must be proportional to the commercial force exerted on the sails, the rudder sets the direction and must be tendered too. Who in your family has a firm grip on the tiller guiding your sailboat of finances?

Society has built in a belief that we have to give everything to our kids so they have it better than we did. Many believe that we have to attain as much as our family, friends and co-workers; but is it the dark side of your finances that cause credit card charging to accomplish this? “Credit cards allow you to acquire items - not buy.” 

Does your credit card debt remain near the same total balance each month? Is it a struggle to make your monthly minimum required payment? Then do you find yourself recharging that payment amount or more a week later? Do you look at your credit card limit as a savings account to use in between paydays? These are very serious indicators that the road ahead may have some unpleasant speed bumps coming.

Manageable credit card debt should not exceed 15% or less of your gross annual income: that is equal to $7500 credit card debt on $50k gross earnings a year. Your mortgage payment (Principal, Interest, Taxes, Insurance - PITI.) should not exceed 28% of your gross income, on $50k that payment is $1167. Just a house payment and 15% credit card debt on $50k will push your debt-to-income ratio to 33%; leaving just 7% for vehicle a payment that will amount to a payment of just $292- that equates to a $15,200 vehicle loan at an average interest rate of 5.5%apr for 60 months.

The above paragraph really brings credit card debt to reality, looking at that scenario there is absolutely no room for additional credit card debt. The medium income in 2009 for Spokane County is $42,839 and national credit card debt is $9797, that’s 22% of gross annual income. The credit card debt reported in 2008 Chapter 7 Bankruptcy filings averaged $17,738. With unemployment reaching 10% nationally or 8.7% in Spokane County as of November 09, credit card debt and Bankruptcies will continue to climb.

In closing; as the recession lives on with nervous anticipation that we don’t slip further into a depression or as we set our sites on future inflation, now is the time to get organized and energized to control spending, save more and payoff unwanted credit card debt. Your credit union has created a “Financial Wellness Program” that is designed to assist all members regardless of their financial situation. Today is a great day to start planning for tomorrow – call today to request your Financial Wellness packet; it will be in your mailbox tomorrow!