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Having your financial house in order gives peace of mind, good prospects for future

Does anybody track where every dime of their money goes? Probably not, but getting a handle on where you spend your money is crucial to getting and keeping your financial house in order.

That's according to consumer credit experts who are preparing for the usual rush of clients that hits the third or fourth week of January -- when the Christmas shopping bills start arriving in the mail.

"Money troubles don't fix themselves. It takes a plan, whether you're deeply in debt or just having trouble saving money for something you need or want. Our mission is to help anyone who needs it and hopefully bring them some peace of mind," said Sandy Shore, spokesperson for New Jersey-based Novadebt, which has an office in Peoria.

"We will also help people who are doing OK financially but have questions how they can improve their situation," she said.

Novadebt acquired the former Consumer Credit Counseling office at 719 Main St., (309) 676-2941. Its services include debt counseling, bankruptcy counseling, housing counseling, financial education and debt management.

The company's mission statement says it will "assist families and individuals in need by providing free financial education, community outreach and housing and credit counseling services; all with compassion and the utmost commitment to quality and integrity."

Shore said the company talks of compassion and integrity because it will not judge people who come to it because of problems with their personal finances. "It is a private matter and we keep it private. Nobody is going to know if you come to us for credit counseling, so you shouldn't worry about any stigma being attached to it," she said.

She said Novadebt hopes to help people resolve issues before they get so out of hand they file for bankruptcy. Bankruptcy is public, she noted. "There is nothing to be lost from getting advice before it gets that far," she said.

The first Novadebt does for a client is help them figure where their money is going. "For a while, at least, you do need to pretty much track every dime you spend. If you don't know where exactly it's going, how are you going to do anything about it?"

Next, Shore said, the credit counselor will help the client set goals and determine how much money it will take to meet those goals, whether they are short- or long-term. Then, after setting goals, is the client told to enumerate the family's other, normal expenses, such as housing costs, utilities, groceries or what have you.

"If there is not enough for all of it, something has to give. You have to decide on what that will be. Maybe you're spending too much on housing so you should think about downsizing or refinancing your mortgage. Or maybe just run the air conditioner less in the summer and keep the heat lower in the winter. Perhaps you eat out too much or you can cut out the latte you're grabbing on your way to work every morning.

"The thing is, there are a lot of things that don't seem like big things themselves, but when they add up it can be quite an expense. Those are things you need to consider," she said.

Shore said people should also build contingencies into their budgets, including money for emergencies and revolving expenses that come up only occasionally, including insurance premiums and buying gifts for Christmas or other occasions.

"If you don't and something comes up, especially an emergency, what are you going to do if the money isn't there? The only thing you can do is borrow. That may take care of the immediate need but then you will have the expense of paying off the loan. Once again, something will have to give," she said.

Shore said Novadebt expects a rush of calls after the holidays again this year but she added the company has seen a definite drop in debt delinquencies the last couple years after the problems wrought by the recession in 2008 and 2009.

"We hope it's mostly because people will remember what happened and that they learned and have no intention of going back to where they were then, she said.

"A good credit counselor can help people get a fresh look at things, a fresh pair of eyes that can see things you didn't think about. For example, more people are getting rid of their telephone land lines because it is an expense they don't need. There may be other little things that can help cut the regular expenses so problems don't come back.

"You want an agency that will work with you, talk with you about how you got into a mess to begin with, then suggest possible solutions. Whether it's Novadebt or another agency, if you need help look for it," Shore said. "You don't have to go it alone."

The same holds true when it comes to other parts of financial planning, such as investing or planning for retirement, said Bob Miller, a stock broker with Heartland Financial Strategists, 6915 N. Knoxville Ave., Suite B, in Peoria, (309) 685-9595.

"When you are talking about what to do with your investment portfolio while worrying whether you will have enough for retirement, you need somebody who is going to work with you on the whole package. So much of it has to work together on your future, that only makes sense," Miller said.

In investing, Miller said a diversified portfolio is wise to minimize risk while maximizing return. It's a delicate balance, he said, "so you really need to make sure you have the right diversification for your needs."

Miller, who gives investment advice twice a month on WHOI-TV's Good Company program, said the people who did best during the recent recession were those with what he called a "low correlating portfolio," one that can show a good return even if price fluctuations aren't always favorable. In 2008, for example, the stock market was down but the futures market was up and having holdings in each provided low correlation.

"You can reduce risk without necessarily reducing the potential for good returns. It's a huge revelation to people when they see it," he said. "We can adjust a person's portfolio structure depending on how much risk they can afford but with low correlation we can be more aggressive and still keep the risk low."

Heartland Financial Strategists will work with clients on any financial planning need, including advice on stocks and bonds, IRAs, Treasury bills, government securities and mutual funds. For retirement planning the company will work with clients on all types of retirement plans, tax plans, estate planning and money management.

"The missing link in retirement planning is often guaranteed income investments. When guaranteed income streams are needed we can turn to variable annuities that start with one amount and grow every year until they start to take it out," Miller said.

Annuities with guaranteed income streams are important because even if the person withdraws the amount they put in, the income continues at the same level. "It is a huge part of any retirement planning process because you will never have less, guaranteed," he said.

Miller said there is no minimum amount a person has to have to start an annuity. "And once you start a contract, you can always add to it, which increases what you will be able to draw out," he said.

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