Many personal finance experts recommend that consumers think about financial steps for the new year in the fourth quarter of the old year, but January gets many to focus. Here are three personal finance stories for business reporters to develop in January that will get the year off to a solid start for their readers:
#1: Set up a debt management plan
Managing debt tops every list of personal finance resolutions. Finance professor Ajamu Loving at The American College of Financial Services advises consumers to pay down the most expensive debt first (credit cards and personal loans, followed by student loans and housing debt), and then to cut back spending, or spend smarter. For a unique twist on the familiar advice of brewing your own coffee and packing your own lunch, the American Institute of Certified Public Accountants adds: team up with a “budget buddy.” Budgeting takes a long-term commitment, just like exercising, says this industry group, and having a partner may make the process easier. Other sources include a debt management agency as credit.org, debt.org, or the National Foundation for Credit Counseling.
#2: Adjust taxes
Tax changes are in the headlines, but despite the view of many U.S. taxpayers, Americans pay near the bottom of OECD nations, at 25 percent of their income versus an average of 34 percent, according to this study from the Federal Reserve Bank of Chicago. But in any season, it’s a good time to review taxes at the start of a new year. Interview a local accountant about the impact of life changes on taxes, such as retiring or getting married or having a child. Also ask a financial adviser for tips on how investors at different stages can ensure they aren’t overpaying on investments.
#3: Check credit reports regularly
After the massive data breach at Equifax, checking a credit report should be a top priority for consumers. Many personal finance advisers advise consumers to spread out requests every four months among the three agencies, but others say this is irrelevant. Why? The three credit-reporting agencies (Equifax, Experian, and TransUnion) don’t share information, which means a mistake or fraudulent activity may fall in the gap. Consumers can request a free copy of their report from each agency once a year under the Fair Credit Reporting Act or by calling 877-322-8228. There are also several other circumstances that entitle them to more than one free annual credit report, such as if they are a victim of identity theft, are unemployed, or on public welfare.
Melinda Opperman at credit.org. Contact info: melinda. email@example.com; 951-781-0114 x.7888.
Staff attorney Chi Chi Wu at the National Consumer Law Center. Contact info: Maggie Ardiente, firstname.lastname@example.org; 202-638-2535, ext. 108.