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.
Updated February 6, 2012 and originally published October 18, 2006.