Are You Making Important Financial Resolutions for 2012?

Here's a question on everyone's mind: After several tough years, will the economic picture improve in 2012? Things can improve for your personal finances—and your family's—if you adopt three powerful resolutions for this new year.

1. Perform a Personal Credit Check Up.
   
   Do you know your credit score? This three-digit number, based on your credit history as recorded in your credit report, influences many things in your life. These range from the interest rates you pay on credit cards and loans (ranging from auto loans to mortgages) to what you pay for insurance to whether you qualify to rent that apartment or house you like. Of concern if you are job hunting, some employers even take credit scores into account when considering new hires. Consequently, having a good credit score—and an accurate score—is important to your financial well-being.
   
   The first step in performing a credit check up is to review your credit report for accuracy.
   Federal law requires that each of the three major credit reporting agencies—Equifax, Experian, and TransUnion—each year provide you, at your request, one free copy of your credit report. The only site to get these free reports is www.annualcreditreport.com. If you haven't checked your report recently, you may wish to look at all reports because different agencies may have different information. If you wish to keep a check throughout the year, request a report from a different agency every four months. Your goal is to check your report for accuracy and to dispute any errors you fine. Our reports What's is a "Credit Score" and How Can It Affect Your Credit? and Tips for Improving Your Credit Score walk you through the process.
   
   Tip: Thinking of clicking on one of those "free credit score" offers that litter the Web? Don't. There's no guarantee that the number is accurate because many of these sites may base their score on out-of-date information and the major purpose of all is to sell you their products, many of which are costly and not very useful (such as "credit repair" services). If you need to know your credit score, buy it from one or all of the big three when you get your free annual credit report. The official site mentioned above offers this option.
   
   What if debt or other financial problems have lowered your credit score?
   Maybe your credit score has taken a hit because you've paid bills late or missed payments. Your payment history has a big impact on your credit score; so one of the best things you can do to raise your score is start paying every bill on time. If you are carrying a lot of debt, usually on credit cards, then paying down that debt is another thing you can do to raise your credit score. Both these steps start improving your score in months. For more tips see our reports Protecting Your Credit and Credit Score in Today's Economy and Tips for Improving Your Credit Score.
   
   Tip: One thing to avoid is "debt settlement services." For the many reasons why this option is not wise, see our report Considering Debt Settlement? Why That's Probably a Dangerous Idea. If you need help, talk first to your credit union about credit counseling. They can help, including referring you to reputable credit counseling services.
2. Make Savings a Priority
   
   Have you saved up a 3 to 6 months emergency fund? Financial planning experts recommend that you make this a priority. I like to think of these savings as a "security" or "peace-of-mind" fund, not just an emergency fund. The goal is to have enough money put aside to cover the basic expenses of your family including food, bills, auto and mortgage payments. Your credit union has several savings products such as money-market savings account or short-term CDs to help you maximize savings while maintaining ready access.
   
   When you have an emergency fund in place, it's time to thing of planned savings toward larger goals such as an education fund for your kids or retirement savings. Our report Are You Saving for Your Kids' College? provides some tips for successful saving. For tips on retirement planning see our report Retirement Planning? It's Never Too Early or Too Late.
3. Plan Ahead for Major Expenditures or Investments
   
   Is 2012 the year you plan to buy a new car or truck? Perhaps you are thinking of buying a new home or refinancing your current mortgage to take advantage of low rates. Maybe, some home repairs or renovations are on the horizon. If so, start planning now to get the best savings.
   
   Saving on cars.
   If you are planning on buying a new car or truck, our Information Edge Car Buying Guide shows you how to shop for a vehicle the right way—the way that gets the most bang for your buck. Go there now to refresh your memory. You'll discover how to calculate how much money you have to buy a vehicle, how to shop your financing, how to locate the vehicle you want, and how to negotiate the sale.
   
   Here are two more tips.
   
   • If your old vehicle is paid off (or if you can squeeze the extra savings out), start saving for a down payment now. Put aside each month the amount of monthly payment you can afford in a credit union savings account. Having a good size down payment (equity in your old car and cash) enables you to take best advantage of manufacturer's rebates and other incentives. The Information Edge Car Buying Guide shows you how.
   • Shop your financing first. Start with your credit union. You'll typically find that your credit union offers better or competitive rates compared to other sources. Often you can take a manufacturer's rebate in cash (or use a part of a down payment) and use your credit union financing and beat lower rate incentive offers.
   Perhaps you already bought a vehicle in 2011 and financed somewhere other than the credit union. Are you paying too much? Call the credit union and compare what you are paying with the opportunity to refinance your vehicle loan with the credit union. Such "second chance" refinancing has saved many members more than a thousand dollars.
   
   Saving on mortgages.
   If you are considering buy a new home, you want one that fits your family's needs and your budget. Our Information Edge Home Buying Guide and Information Edge Mortgage Guide can help you plan wisely by considering all aspects of the buying process from determining how much you can afford to spend on a home, to shopping for a mortgage, to finding a house or condo that fits your needs and budget and is in the location right for you. As part of your planning, be sure to consider the mortgage products offered by the credit union. Buying a home in today's market can be a challenge. Our report What Do You Need to Know About Buying a Home in Today's Market? can help you prepare to meet that challenge.
   
   If your current home meets your needs, you may wish to consider if now is the right time to refinance to take advantage of historically low mortgage rates. Again, check the refinancing options offered by the credit union. Our report Is Now a Good Time for a New Mortgage or Refinancing Your Current Mortgage? can help you consider the issues. And I recommend that you also talk to your credit union about options.
   
   Other large expenditures.
   Is it time to replace old appliances or an old, less energy-efficient heating and cooling system? Or is it time for a new roof. Whether you're facing smaller or larger expenditures, planning ahead can help you save toward these needs. Home improvements may also be a good use for a home-equity loan, Our report Thinking About Home Improvement? What Do You Need to Know? can help you plan. And of course, if a home equity loan is in order, you'll want to call your credit union.

Make 2012 a prosperous year for your family—start by making and following through on some money-saving and wallet-protecting financial resolutions.