This Week in Your Wallet: December 27, 2011
Whew. We made it through another holiday season. I know, they’re fun, but they’re also exhausting. So I hope you’re taking a little breather. I for one am enjoying the chance to peruse the various “top-ten” lists: top ten news stories, top ten movies, even the top ten longreads of 2011. (The last list has been a great chance to go back and read some of the longer journalistic pieces I’ve missed throughout the year. A particularly good list of the best long-form journalism of 2011 can be found here.)
Perhaps being in this list-y mood is why a story on the top financial lessons of 2011 caught my eye. Among my favorites:
- Don’t obsess over the news. First in August with the debt ceiling debacle and then this fall with the Eurozone crisis, we saw a scary correlation between bad economic news and market volatility. And market volatility is never good, because it plays with our emotions and often makes us act impulsively. We want good results and we want them immediately. But the market rewards those who stick around for the long-term. A recent study by Fidelity revealed that 401(k) accounts are almost back to pre-recession levels — but only for those who didn’t back down and stop contributing. Long story short? If the headlines are bad, turn off the TV — and keep your hands off your portfolio.
- Take control of your finances. We may not be able to control the news or the market, but we can control how much we spend, and more importantly, how much we save. So if you haven’t already, automate your savings, and watch your money grow. You’ll suddenly feel more in control than you did before.
And two money lessons that didn’t appear in the article but are on my personal list:
- Limit what you borrow for college. We all saw the headlines. Student loan debt will reach $1 trillion for the first time ever, and college tuition is soaring faster than inflation. Be careful about what — and how — you borrow so you don’t end up in a position that will cause you to default.
- It’s never too late to get on track. This isn’t something I learned in 2011 specifically, but it’s something that always bears repeating, especially as we approach the season for New Year’s resolutions. It doesn’t matter how old or young you are. If you’ve made financial mistakes this year, pick yourself up, dust yourself off, and make a plan that will put you back on track. Maybe it’s saving $10 a day, maybe it’s finding a new job with better pay. Whatever it is, you can do it!
What were your top financial lessons of 2011? Better yet, what are your financial resolutions for 2012?
And now for a quick look at the other headlines of the week:
Year-end tax tips
I know, I know. It feels like you just did your taxes. But seeing how taxes have been in the news recently (payroll taxes, at least), I though it wise to take a look at some of the things you can do now to save you money on your 2011 taxes. Among them? You can get a credit for 30 percent of the cost of alternative energy you use for your home, including solar, wind, fuel cell and geothermal equipment. This applies to automobiles, too: You can get a credit of up to $7,500 for qualified plug-in electric vehicles like the Chevy Volt and Nissan Leaf. For more more year-end tax tips, you can access my article here.
No-fee ATMs on the way
A company called Free ATMs NYC plans to institute several thousand ATMs that are no-fee and are not tied to any one bank. The only catch is this: instead of paying a fee, customers will have to watch an ad. However, as someone who calls 1-800-FREE411 instead of the usual 411, I don’t see this as such a terrible thing. For more information on these no-fee ATMs, you can check out this Consumer Reports article.
Wishing everyone a happy and safe new year,
Jean
