Money Magazine is running an extended feature targeting 7 of the most annoying money problems, and proving some easy solutions. Here is a shortcut to the seven shortcuts:
1. Ace your retirement. Buy a target-retirement fund in your 401(k). If you believe you’ll be retiring in 2030, you can buy a fund that targets that date and has “appropriate” risk for that time frame. The article doesn’t mention that with any fund of funds, you’re also paying fees on top of fees.
2. Invest (almost) like a pro. If you don’t want to buy a target-retirememnt fund, use a stock index fund and a bond index fund to achieve the level of risk you’re willing to undertake. Here’s their rule of thumb. Subtract your age from 120 and put that percentage into the stock fund. I’ve heard this rule using 100 as the baseline rather than 120.
3. Cruise into college. The Utah Educational Savings Plan will configure your 529, a college savings investment plan, using low-cost Vanguard funds. Or view your local options at savingforcollege.com.
4. Disaster-proof your family. Build an emergency fund, buy life insurance, and write a will. The first part applies to anyone, including single men like me. Once I have a family, I’ll take care of the rest.
5. Protect your identity. Opt out of receiving junk mail, which is targeted by identity thieves, by calling 888-567-8688. Shred paperwork and opt to receive statements via email rather than snail mail. Get your credit report for free three times a year from AnnualCreditReport.com.
6. Shop smart for a car. If you don’t want to deal with the hassle, hire a buyer for $400 to $800. Buying online is an option, as well.
7. Simplify your credit life. If you carry a balance, use a low-rate card. Call the company and ask if they can lower your interest rate. If you pay in full like I do, use a rewards card.
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Regarding money magazines 7 shortcuts. On item number 4 you stated you’d work on the first and leave the rest to last. Please do get a will now even though you’re single and young. If you die without a will your loved ones will suffer needlessly. Several friends died in a car accident when they were in their 20s and not having wills prolonged the mourning for all their families. Having a will would have simplified things and made a horrible time a little less horrible. Find an attorney who’ll do a basic will for you or see what you’re states requirements are for a will you write yourself (may need several witnesses in front of a notrary). Yes your 401k and Roth has a beneficiaries designated but your clothes, car, computer equipment will need to be disposed of. Your family will most likeyly have to hire an attorney anyway to handle your estate intestate so you might as well get one now and save them the potential trouble. Good luck.
Dear Money Magazine:
Ace your retirement? I earn minimum wage. Retirement will never be an option for me. Give me a break. Sheesh. (Rolleyes)
“N 5…Get your credit report for free three times a year” you should check your credit report EVERY time you are applying for credit card or taking a loan. Why? When you regularly check you report you lower probability to be a victim of identity theft, besides it will help you identify if your score is good anough for particular card or loan.
“N 7. Simplify your credit life” by paying your credit balance in full each month. If you can’t pay as much as you can. Never exceed yuor credit limit. If you prove you creditworthiness you will get a chance to negotiate to increase your credit line, and lower your fees.