Eileen Alt Powell, The Associated Press
NEW YORK - Resolved: I'm going to save more money, pay
down my debt, check my credit report, improve my job prospects and
review my life insurance.
For those who could use some help in coming up with financial
resolutions for the new year, these are the recommendations of
consumer experts from around the country.
Find ways to save
Greg McBride, senior financial analyst at Bankrate.com, the website
of Bankrate Inc. in West Palm Beach, Fla.:
"The biggest barrier to saving is not getting into the habit of
saving. To start, pay yourself first by setting up direct deposit
from your employer or
your checking account into a high-yield savings account.
"Establishing a budget and tracking expenses against your income
isn't just a spending strategy, it is also a savings strategy. Once
you know where your money is going, you can identify opportunities
to further boost savings by trimming expenses. Make sure you take
advantage of a high-yielding money market or savings account, where
yields still top 5%, instead of letting whatever savings you have
pile up in your current bank, where yields are often below 1%."
Deal with debt
Daniel A. Mica, president and chief executive of the Madison,
Wis.-based Credit Union National Assn.:
"There is no such thing as 'good' debt or 'bad' debt. There's just
debt. The way to get rid of it is to pay off the balance carrying
the highest interest
rate first, and that's generally a credit card. Then work your way
down to the balance with the next-highest rate.
"Since we're credit union people, we believe in making it a positive
experience. That is, do something that reinforces that you are
debt. Say you're going to pay off a card and tighten your belt for
five months so you can squeeze out an extra $100 a month toward the
debt. In the sixth month, spend at least a part of that $100 on
something enjoyable to reward yourself for what you've done. Next
month, start in again."
Get a free credit report
Paul S. Richard, executive director of the nonprofit Institute of
Consumer Financial Education in San Diego:
"Since the fall of 2005, consumers nationwide have been eligible to
obtain a free copy of their credit report every year from each of
the three main credit reporting agencies - Equifax, Experian and
TransUnion. There's a website,
http://www.annualcreditreport.com , but we recommend that people
call the toll-free number, (877) 322-8228. That's because there are
about 50 impostor websites out there - most of them selling
subscription credit services - so it's important that people who
want to use the website type
the name correctly.
"We suggest that people order a different one every four months.
That way you're checking your credit year-round. If there are
inaccuracies, notify the credit bureaus right away. They could be
depressing your credit score, which means you may be paying more to
borrow than you should. Also look for suspicious activity. It could
be an early sign of identity theft."
Broaden your prospects
John A. Challenger, chief executive of Chicago-based outplacement
firm Challenger, Gray & Christmas Inc. :
"Many people find that when they change jobs, whether voluntarily or
involuntarily, they locate their new positions through people
to know, acquaintances they've developed. You can't expect to stay
at one company all your life and rise up the ladder like people used
"So go out and join industry professional organizations or alumni
associations and get engaged. It's such important career insurance,
a way of
expanding your Rolodex.
"Vow to spend 5% to 10% of your time working at building
relationships in different communities you could be engaged in -
your church, charitable group, professional associations. It may not
sound important, but it really is."
Review life insurance
Neal Sullivan, secretary-treasurer of the Independent Insurance
Agents and Brokers of New York:
"If you have a policy and it's more than a few years old, sit down
with your agent and look it over. The rates on life insurance have
drastically over the past couple of years, so you probably can get
more insurance for the same amount of money - or the costs will go
down for the
amount of coverage you have.
"How much do you need? Everybody's situation is different. A lot of
new homeowners want enough to protect the family in case something
happens, so they get enough to at least cover their mortgage so the
spouse and the remaining family members won't be kicked out of their
"That's kind of the baseline. Obviously, you probably need more than
that if you have kids, want them to go to college, things like that.
"Don't think that being single means you don't need insurance. Just
to have a funeral and be buried is expensive, so you should have
coverage for that."