Thursday, February 3

Fatten your wallet instead of your waist

BECKY REIGEL and MARY HANCE

Gannett News Service

Paring down your expenses until the holiday bills are paid can make you healthier - both financially and physically.

The bonus: You might keep some of the new habits beyond the 90 or 120 days needed to get in better financial shape.

``Most people go into the holiday with a spending plan. But along the way, they kind of get caught up in the spirit of the season and overspend,'' says Mike Cherry, president and chief executive of Consumer Credit Counseling Service in Springfield, Mo. Like calories at a Christmas party, ``they don't really track it.''

But now that you've tucked on a few pounds and a few thousand in credit-card bills, assess the damage, first to your finances.

``Get out all your bills and prioritize them by interest rate,'' Cherry says.

Make a list of the cards, their balances and interest rates. Pay off the card with the highest interest rate first, says Janet LaFon, consumer and family economics specialist for the University of Missouri Outreach and Extension in Carthage, Mo.

Even though one card becomes the focus, make at least a minimum payment on each credit card to avoid late fees.

Then put together a three- or four-month payoff plan and tighten your belt.

"Most people go into the holiday season with a spending plan. Along the way, they kind of get caught up in the spirit of the season and overspend," says Mike Cherry, president and chief executive of Consumer Credit Counseling Service in Springfield, Mo. (Bill Clark photo illustration, GNS)

Deborah McNaughton, a California-based author of several books on debt and credit, calls it her ``money calorie counter'' plan.

For example, she says passing up potato chips with lunch every day could save you $176.80 and a whopping 63,232 calories a year. Giving up french fries could save 140,400 calories and $533 a year. Or skip that daily slice of cheese pizza and save 80,340 calories and $650.

Just think what would happen if you added a little exercise.

Like most counselors, McNaughton suggests keeping a notebook in which you write down every penny you spend for 30 days.

``We all need to get a reality check on how much we are really spending,'' she says. ``Once a person puts it on paper, they can become proactive. They can take control.''

Monthly expenses include rent or mortgage, utilities, loan payments and other living expenses. But people often cannot figure out where the rest of their money goes.

``Things that people neglect categorizing properly are the ATM purchase, ATM cash withdrawals and debit-card purchases,'' McNaughton says. ``These must be broken down. If you get $20 from your ATM, list every penny you spend the cash on.

``ATM withdrawals are the No. 1 problem in letting money slip through your fingers,'' she says. ``If you're being charged a fee for using your ATM, write that down, too.''

Misuse of credit cards is the other big problem.

Too many people see a credit card as an additional paycheck, the counselors say. Pay off a credit card every month and it becomes a way to extend your money; pay only a portion and it adds to your expenses.

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(Reigel writes for the Springfield (Mo.) News-Leader; Hance writes for The Tennessean.)

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Related tips

Tips for trimming

Sometimes helping your wallet can help your waistline, too. Some tips for doing either - or both:

- Bring a thermos to work. Latte at a fancy coffeehouse is $2 a cup or more. That adds up to $10 a week, $40 or more a month. Splurge on a pound of good beans for home brew. Besides, a Starbucks white chocolate mocha, even with skim milk, is 400 calories.

- Take a can of diet soft drink from home. Vending machine soft drinks can range from 60 cents to $1. Bringing your own can be as low as 25 cents.- Want to save more? Switch to tap water. The cost of bottled water can rival soft drinks.

- Take your lunch to work and save $2 to $3 a day. Even the least expensive restaurant meal is around $5 a day, at least $100 a month. Plus you'll be able to control the fat and portion sizes.

- Cook evening meals at home and take advantage of grocery specials. If you still want someone to clean up after you, cut the restaurant meals to once a week or two, use coupons and go to places with less expensive menu items than usual.

- Drop the gym and health-club memberships and check out video workouts. Use cans of vegetables for weights. Daily walks don't cost a cent.

- Watch TV instead of going to movies. A family of four can easily spend $25 on first-run movie tickets, not including concessions. Make your own fat-free popcorn and you've cut calories, too.

- Stop cable for a while until the bills are paid off. Cable TV with a premium channel tops $50 in many places. If you can't bear the thought of antenna-only TV, cut down to the most basic service.

- Go to the library instead of buying books. Many public libraries also have DVDs and videotapes to check out, eliminating any need to rent a movie.

- Quit smoking and use the money toward your debt. It will benefit your health and your family. The price of cigarettes averages almost $4 a pack nationwide.

- Turn the thermostat down while you're away or asleep, even by 1 degree. You'll save 1 percent to 3 percent on your bill. Put on a sweater or do some exercise if you're chilled and change the furnace filters monthly. They're inexpensive and improve a furnace's efficiency.

- Don't delay filing your income tax return if you're due a refund. But don't pay a pricey tax preparer or agree to a refund-anticipation loan. Early filing - universities and nonprofit groups like AARP often offer help - means an earlier refund. Have the refund electronically deposited into your bank account for even quicker turnaround. Use half to pare your credit-card debt; save the rest.

- Review your bank charges and insurance coverage. Find a bank that doesn't charge a monthly fee and find automatic-teller machines affiliated only with your bank to avoid ATM fees. On insurance, see if you can save with higher deductibles or by putting home and auto policies with one company.

- Dump the change from your pockets into a box, bottle or other container daily. It adds up quickly and lightens the load when you step on your scale.

- Sell your old stuff. As you drop pounds, check with a consignment shop about selling suits, dresses and designer clothes in your old size. Consignment stores sell clothes for about a third of the original price tag, keeping 60 percent and returning 40 percent to the owner. Other items can become part of your spring garage sale.

- Gannett News Service