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This is a perfect time to set new goals – to become more physically fit, read more, or get organized. It’s also a great time to assess your finances, gain control, and stick to a new budget or saving plan. Taking control of your personal finances will allow you to save and prepare for unexpected expenses. So, it’s time to get financially fit! Here are some tips to get started:

Get Organized

How about treating yourself to a post-holiday gift of a financial organization system? Alphabetized file folders or filing systems specifically for financial organization are available in January as people begin to prepare for tax season. Check your local office supply store for special offers. While you’re at it, you may consider purchasing a shredder to keep your personal information safe from identity theft. There are also roller stamps that blot out personal information on bills and other forms where you don’t want your information to appear.

Create a Budget

I’ve talked before about the importance of creating a budget – track your income and expenses to see how much money you have coming in and how much you spend. If you have debt, establishing a budget will help you to pay down your debt while saving. You can use computer software programs or basic budgeting worksheets to help create your budget. Include as much information as you can and review your budget regularly – that will help keep you on track.

Lower Your Debt

Debt from student loans, mortgages, and credit cards is nearly unavoidable. Did you know that most families carry about $10,000 in credit card debt? Spending more money than you bring in can lead to financial stress. Try to pay more than the minimum due and be sure to pay on time. Pay off debt with higher interest rates first. Transfer high rate debt to credit cards with a lower interest rate.

Save for the Unexpected and Beyond

Pay yourself first. Saving is important; it ensures a comfortable future that can endure financial surprises. No matter how old you are, it’s never too late to begin saving. Save at least 10% of your income for retirement. Enroll in a retirement plan or consider optimizing an established retirement plan. Contribute at least the maximum amount that your employer will match (these types of contributions are tax deductible). Think about an Individual Retirement Account (IRA) if your employer doesn’t offer a retirement savings plan. Keeping about three months’ salary in a savings account is recommended for financial emergencies, like hospital bills or loss of a job. Finally, if you receive direct deposit at work, ask your employer to send a specific amount to your savings account (or set up an automatic transfer from your checking account to your savings account).

The term “phishing” (as in fishing for confidential information) is a type of consumer fraud that refers to a scam that encompasses fraudulently obtaining and using an individual’s personal or financial information. A consumer receives an email which appears to originate from a financial institution, government agency, or other well-known entity. The message describes an urgent reason you must “verify” or “re-submit” personal or confidential information by clicking on a link embedded in the message. The provided link appears to be the website of the financial institution or other agency, but in “phishing” scams, the website belongs to the fraudster or scammer.

Once inside the website, the consumer may be asked to provide Social Security numbers, account numbers, passwords, or other information used to identify the consumer (like maiden name of the consumer’s mother or consumer’s place of birth). When the consumer provides the information, the fraudsters can then begin to access consumer accounts or assume the person’s identity.

These criminals send out millions of emails hoping that even a few will give away valuable information. And, they often threaten dire consequences if consumers don’t act immediately. Please know that your financial institution or any government agency will not be asking for confidential information in this manner. If you suspect that an email or website is fraudulent, please report this information to the real bank, company, or government agency, using a phone number or email address from a reliable source. For example, if your bank’s website page looks different or unusual, contact the bank directly to confirm that you haven’t landed on a copycat site set up by the bad guys. You may also contact the Internet Crime Complaint Center (www.ic3.gov), which is a partnership between the FBI and the National White Collar Crime Center.

If you think that you have been a victim of identity theft, maybe because you submitted personal information in response to a suspicious, unsolicited email or you see unauthorized charges on your credit card, immediately contact your financial institution. It may be necessary to close existing accounts and open new ones. You can contact the police and request a copy of any police report or case number for later reference, and you’ll want to call the three major credit bureaus (Equifax at 800-525-6285, Experian at 888-397-3742, and TransUnion at 800-680-7289) to request that a fraud alert be placed on your credit report.

Education is a powerful weapon in the fight against “phishing”. Follow these tips to avoid becoming a victim: never give out personal or financial information in response to an unsolicited phone call, fax or email, no matter how official it may seem. Do not respond to emails that warn of dire consequences unless you validate your information immediately. Check your credit card and bank account statements regularly and look for unauthorized transactions. Look for the padlock or key icon at the bottom of your Internet browser – most secure Internet addresses (though not all) use “https”. Report suspicious activity and contact your bank immediately if you have responded to a “phishing” email.

A budget is an organized list of your sources of income and the money you spend on essentials like housing and food, fun things like dinner and a movie, and what you need to save for the future. Just as using a map to make sure you reach your destination, budgeting is a tool that helps you realize your financial goals. It can help you navigate those moments when you experience financial difficulties. You can take charge of your finances by setting financial goals, planning a budget, and sticking to it. Saving is important for many reasons, including for unexpected expenses such as car repairs, medical emergencies, and possible unemployment, and for planned needs such as a vacation, college tuition, or retirement. A budget can also help you reduce your debt.

Collecting as much information as you can about your spending will allow you to prepare and plan. Keep monthly records of your spending so you’ll spot places where you can save money. Know how much you can reasonably spend — and be realistic about it. Being disciplined to save a smaller amount of money on a regular basis is generally better than saving more money sporadically. Finally, rewarding yourself by spending a reasonable portion of money you have saved with the help of a budget is a good incentive to stick with your budget.

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Teens notice each time you pull out the plastic – but do they understand how it works? Probably not. You might be using a debit or credit card – very different ways to pay for things, but to kids, they look the same. Any time you make a purchase, regardless of whether you use cash, credit or debit, there’s an opportunity to teach kids about saving, budgeting, and credit.

Learning about credit cards and debit cards is particularly important for teens, with debit cards becoming a very good option over credit cards. In fact, 50% of teens aged 18 and 19 had a debit card in 2005, according to Teenage Research Unlimited, up from 37% in 2001. Moreover, credit cards held by this same group declined to 25% in 2005 from 45% in 2001. Teens and their parents are realizing that a debit card can be a very valuable budgeting tool since cardholders can only spend what is already in their account. As kids mature, a credit card will be an important option in order to establish a credit history that may be necessary to rent or purchase a home. The credit history may even be checked by a potential employer. Thus, helping your teens develop good credit management habits will help them avoid serious consequences that can last for years.

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Planning and saving for retirement may seem like goals that are far in the future. Yet saving, especially for retirement, should start early and continue throughout your lifetime. Here are four reasons why saving matters to women – and especially to you!

Do you know?

• Women are more likely to work in part-time jobs that don’t qualify for a retirement plan. And working women are more likely than men to interrupt their careers to take care of family members. Therefore, they work fewer years and contribute less toward their retirement, resulting in lower lifetime savings. If you work and if you qualify, join a retirement plan now.
• Of the 62 million wage and salaried women (age 21 to 64) working in the United States, just 45 percent participated in a retirement plan. Remember, even small amounts can earn interest and add up over time.
• On average, a female at age 65 can expect to live another 19 years, 3 years longer than a man the same age. Savings can increase a woman’s chances of having enough money to last during her retirement.
• By and large, women invest more conservatively than men. Choose carefully where you put your money and learn how to improve your investment returns.

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How to protect your money, your credit record — and your sanity — if you become a victim

Consider this: Your wallet is stolen. You immediately call your bank and credit card company to report the problem, close old accounts and open new ones. You even remember to call the Social Security Administration to notify them that you had your Social Security card in your wallet. At the end of the day, you feel fairly confident that the incident is behind you.

But weeks later you receive past-due notices on bills for merchandise you never purchased, and a few months later your application for an auto loan gets rejected because someone has used your name and Social Security number to open new accounts and run up thousands of dollars in debt. The good news: Your actual liability for these unauthorized purchases is limited by law or industry standards. The bad news: It’s likely that you’ll spend many frustrating hours trying to clear your name and straighten out your credit history.

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Nine ways to eliminate clutter, organize accounts and streamline how you manage your money

There are many reasons to organize and simplify your financial life. Eliminating clutter, saving time and reducing stress are surely among them. And here’s another motivating factor: Not keeping tabs on your finances can be costly if it results in fees or interest charges you could have avoided, investment losses, additional taxes or other pitfalls. FDIC Consumer News offers a checklist of nine basic things you can do to get your money matters in order…and keep them that way.

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Everyday Teachable Moments

In many families money is a taboo topic. But you can help your children and grandchildren learn financial lessons that will last a lifetime by looking for teachable moments in your daily life that naturally bring up the topic of money. Here are some examples of teachable moments to help you get started:

When depositing your paycheck, talk to your kids about:

• Budgeting some of your paycheck to pay for things like rent, food and clothing.
• Saving a portion of your paycheck to build a nest egg for future expenses like college tuition and retirement.

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Have you ever taken $40 out of the ATM and a few hours later asked yourself where that money went? Or, do you use your debit card to make purchases but don’t keep track of them…and then wonder how your balance got so low?

While everyone can benefit from learning about money management and taking a more hands-on approach with their finances, young adults – including those just starting a career or a family and others still in high school or college – have plenty to gain by learning to be smart about money, and a lot to lose by making uninformed decisions.

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It’s that time of year – the time to ring out the old and ring in the new, to ditch bad habits and replace them with good ones. We can’t guarantee you’ll lose weight, or become a better human being, but we can give you some suggestions to help you whip your finances into shape. Here are our top 11 tips for 2011.

1. Save and invest. Don’t underestimate your ability to save and invest. With compound interest, even modest investments now can grow over time.
2. Lighten your credit load. Paying off high-interest debt may be your best investment strategy. Few investments pay off as well, or with less risk than, eliminating high-interest debt on credit cards or other loans.
3. Boost your “rainy-day” fund. Many experts recommend keeping about six months of expenses in a federally insured account to cover sudden unemployment or other emergencies.
4. “Sure thing” is fine as an expression but not as an investment pitch. Promises of guaranteed high returns, with little or no risk, are a classic warning sign of fraud. The potential for greater returns typically comes with greater risk. You know the saying — if it sounds too good to be true, it probably is.
5. Take charge of your money. If you don’t know where it goes, start keeping track. There are plenty of tools to help you set a monthly budget and stick to it.
6. Pay yourself first. Put yourself at the top of your “payee” list. Regular automatic deductions from your paycheck or bank account into a savings or investment account will keep you on track toward your short and long-term financial goals.
7. Know your investment self. You’re the best judge of yourself. Use that knowledge to find investments that are a good match for you, based on your goals and your ability to tolerate risks.
8. Make sure your older investments still fit you. Take time to review your holdings and see if they’re still appropriate for you. If you’ve outgrown them, it’s probably time to sell them and buy something better suited to you.
9. Don’t put all your eggs in one basket. One way to reduce the risks of investing is to diversify your investment holdings. Think twice before investing heavily in shares of your employer’s stock or any single investment.
10. Ignorance isn’t always bliss, especially when it comes to your account statements. Sure, it can hurt to look at statements when investments are losing value. But if you don’t review your statements, you may miss problems in your accounts that are unrelated to performance.
11. Do your homework. Asking questions about financial opportunities and checking out the answers with unbiased sources can help you make informed choices and avoid fraud.

© The Office of Investor Education and Advocacy