Kevin Hunt - The Bottom Line
The Bottom Line
January 5, 2013
It's too late for a 2012 makeover. Here are a few ways to make yourself a better, bolder consumer in 2013:
>> Fire your bank. Don't like all the charges and fees? Say goodbye. Then shop around. A local credit union might be the best place for big-bank refugees.
>> Fire your cable company. Join the switch to Hulu Plus, Netflix and other premium services like Vudu. Or use the threat of leaving to negotiate a lower cable rate. (Just be prepared to back up that threat.)
>> Prepare for retirement. How much do you really need? More than you can imagine. Plug some numbers into an online retirement calculator. (Try a simple one like Bloomberg's.)
Some advisers recommend putting aside 25 percent of your annual income. A new calculation recommends savings totaling 11 times your final salary. (Ugh!) Whatever your age, make it a priority in 2013.
>> Stop fearing your 401(k) and IRA: This is your retirement. Don't react by turning your head, as if you've stumbled upon an open-heart surgery video on The Learning Channel. The annual contribution for 2013 is $17,500, up from $17,000. Anyone over age 50 also can make $5,500 in additional catch-up contributions each year. Use every penny of those allotments. If your employer offers a matching contribution, take the full benefit.
For 2012 (yes, there's still time), you can contribute for a traditional or Roth IRA $5,000 — $6,000 if you're at least 50 — or your taxable compensation for the year, whichever is smaller. For 2013, it's $5,500 ($6,500 for over 50).
>> The state Department of Consumer Protection's online license lookup (www.elicense.ct.gov) service is not just for checking on local home improvement contractors. You'll also find the status of acupuncturists, architects, doctors, embalmers, hairdressers, hypnotists, naturopathic physicians, optometrists, paramedics, psychologists and even seed labelers. Licensing does not ensure a certain skill level or even basic competence, but it makes it much easier for a consumer to resolve complaints.
>> Take advantage of low interest rates. Mortgage rates remain at or near historical lows for both 30- and 15-year loans. If you're not buying a house, consider refinancing your current mortgage. To see if it makes sense, try Bankrate.com's refi calculator.
>> Cash in on your credit card. Pay off debt or finance a kitchen makeover with a zero-percent, no-fee balance transfer or cash-now offer once again available to consumers with good credit. To avoid additional charges, do not use the card until that debt is paid off.
>> Stop using your debit card. It's a high-risk, no-reward card. Get the extra protection of a credit card that can also offer cash back on purchases, extended warranties and fraud protection.
>> Pay off your debt. Start with some behavior modification: Spend less. Put money away each week or have it withdrawn automatically monthly into your newly created Debt Fund account.
>> Doomsday scenarios. A living will, or advance directive, is a legal document that tells family members and doctors what life-sustaining medical treatment you will allow and under what circumstances. A living trust, also a legal document, distributes your assets while avoiding probate.
>> Monitor your credit report. Every consumer is allowed a free credit report each year from the three national credit reporting agencies: Equifax, Experian and TransUnion. Get them at http://www.annualcreditreport.com or by calling 1-877-322-8228. Avoid other sites promising free credit reports. (They're usually not free.)
>> Be prepared for identity theft. If you're a victim, place a fraud alert on your credit reports by calling one of the three national reporting agencies: Equifax (1-800-525-6285), Experian (1-888-397-3742), TransUnion (1-800-680-7289).
The state attorney general's office recommends contacting your creditors and bank. Also, change passwords and PINs, particularly on e-mail accounts. File a complaint with the Federal Trade Commission (www.ftc.gov, 1-877-438-4338). And call local police. Identity theft is a Class D felony in Connecticut, punishable by up to five years in prison and a fine.
>> Make yourself smarter in 2013. Educate yourself (for free): Sign up for college courses at Coursera (www.coursera.org), where I found Wesleyan's "The Language of Hollywood: Storytelling, Sound, and Color" and Berklee College of Music's "Introduction to Music Production." You'll find a broader free education (kindergarten through college) at iTunes U, downloadable to an iPad, iPhone or iPod Touch.
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