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For Immediate Release Contact: Patrick Harris Director of Media Relations Ohio Credit Union League pharris@ohiocul.org 800-486-2917

Subject Your Monthly Budget to a Spring Cleaning
Overspending and high interest rates are the cobwebs and dust mites of your personal finances

Columbus, Ohio (March 16, 2011) Spring has nearly sprung, which means many Ohioans are looking forward to warm weather traditions like family vacations, afternoons at the ballpark or the golf course, day trips to area parks for picnics, or meals on their favorite restaurant’s patio. Though these may be the rites of the season, it is important to make sure your finances are in order to be able to enjoy the sunny outdoors with friends and family.

“It is not uncommon to get out of the house and overspend when warmer weather is upon us, especially after being stuck inside through a long, cold winter,” said Paul Mercer, President of the Ohio Credit Union League. “It is important to take a look at your personal finances before going on a spring spending spree. Examine your budget, evaluate your debt load, and give yourself some financial limits so you don’t overwhelm your wallet.”

Below are common questions to financial matters and some tips on how to perform a “spring cleaning” on your or your family’s budget situation.

Q: My credit card debt does not seem to decrease, even though I have been making regular monthly payments. What can I do to pay these down?

A: The ability to pay down your credit card debt is directly attributed to your interest rate. If you are not paying the amount down, contact your card issuer and ask what rate you are paying and why. Then ask if the interest amount can be lowered. If it cannot be lowered, look for another issuer offering a lower rate and see if the terms, conditions, and fee structure make that card more attractive. Also, pay more than minimum amount to really start to lessen your debt load.

Q: I make enough money to cover my expenses, but I don’t know where my money is going. How can I track my spending better?

A: Keeping track of your income and bills is only the first step. To really get an idea of where your money is going, you should keep a spreadsheet and track all of your transactions. To do this, keep your receipts for two months and enter them into a monthly spreadsheet. Then categorize your spending with labels like mortgage/rent, bills, car, groceries, entertainment, and miscellaneous. You will see where your money goes rather quickly, and where to cut back.

Q: Which type of debt is the highest priority for me to pay off: car, mortgage, or credit card?

A: Typically your mortgage and car loans should have significantly lower interest rates than your credit cards, so you should always pay your credit card debt, the most expensive, down first. First, contact the card issuers and see if you can get your interest rate lowered. Second, pick the card with the lowest balance and pay it off first. Doing so will significantly help your overall debt to income ratio, and will increase your credit score.

Q: I want to take a vacation, but I don’t think I can afford it this year unless I put it on credit card. Is this a good idea?

A: Credit cards are not the best way to finance a vacation, unless you plan on paying the full amount off quickly. If not, that $2,000 trip to the beach may cost you thousands more in interest. Stick with your gut instinct this year and forgo the vacation, and instead set-up a vacation club account at your local credit union. Put some money from each paycheck away into this interest-earning account, and start looking for places to go next year.

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The Ohio Credit Union League, with offices in Columbus, is a state trade association representing 390 credit unions. Credit unions are not-for-profit financial institutions owned and democratically-controlled by their members. Ohio credit unions provide savings, loans, and other consumer financial services to their 2.69 million members. To learn more, visit www.OhioCreditUnions.org.