Financial fitness: Take charge and get your money 'house' in order Published Feb. 11, 2009 By Andrews Federal Credit Union staff McGUIRE AIR FORCE BASE, N.J. -- Every year many people set resolutions to get into physical shape - a resolution that quickly fizzles because of the self-motivation, time commitment and discipline required. However, everyone should set financial resolutions each year that include certain goals to be accomplished by year's end, such as starting or adding to an emergency fund, improving your credit score, and developing a household budget. Starting or adding to an existing emergency fund may help prevent debt. Having an emergency fund will give you money set aside in preparation for the "unexpected" expenses that pop up - like car repairs, medical expenses, or the washer or dryer that suddenly breaks down. Experts recommend that you should have three to six months worth of income saved for emergencies. If you don't have an emergency fund, it's easy to start getting a small allotment transferred to a savings account. The hard part is not tapping into the account unless a true emergency occurs. Secondly, you should take steps to improve your credit score. Having a clean and positive credit history will allow you to get the best rate possible on loans for a car, home or even a credit card. You can review your credit reports from each of the three credit bureaus every year by requesting them from www.annualcreditreport.com and then you should make sure to check them for errors. If you find errors, contact the credit bureau on which the error occurred, and dispute those errors. Next, work to improve your score by paying bills on time and by reducing the amount owed versus your credit limit. Lastly, achieving a healthy financial position this year involves developing a household budget. Looking at what funds flow into and out of your household can really be an eye-opening experience. You should carry a pen and paper around with you and track your spending for two for four weeks to get to know your own spending habits. This process can show where money is "leaking" from your pockets and where reductions can be made to free up money for savings or even paying down debt. Sit down and calculate how much you are spending on discretionary items. Look at utilities and cell phone and cable contracts. Maybe you can bundle packages or reduce your cell phone minutes. Also, keep in mind that a $4 muffin and coffee five times a week adds up to about $80 month. That's about $1,000 a year that could go toward your emergency fund, other savings, or paying off a credit card. It's not too late! Make time now to set your financial resolutions for the year and use these three simple tools to start on the path of taking charge of your money. For more information, financial calculators, Web casts and other free resources, visit the Andrews Federal Credit Union Online Education Center at www.andrewsfcu.org/education.