This Week in Your Wallet: February 12, 2013
I’m not usually one to fuss over the Grammys (I’m with Kelly Clarkson — I had never heard of Miguel before, either!), but on Sunday night, I found myself tuning into CBS to see all the rock n’ roll glamour. However, instead of catching the red carpet pre-show, I stumbled upon a fascinating 60 Minutes piece called “40 Million Mistakes.” Its subject: our credit reporting agencies and the errors they make on our credit reports.
The findings of the CBS investigation were concerning, to say the least. CBS reports that, according to a Federal Trade Commission study, one in five Americans has an error on their credit report. Worse, one in ten Americans has an error that might lower their credit score. Worst of all? These mistakes can be extremely hard to fix. 60 Minutes profiled a woman named Judy Thomas who for years had debt on her credit report that actually belonged to a Judith Kendall. After filing dispute after dispute with the credit bureaus, Judy Thomas sued Equifax and TransUnion in federal court.
In a CNN Money article, the Consumer Data Industry Association defended the credit bureaus, noting that 98 percent of credit reports are “materially accurate.” However, as CNN pointed out, that remaining two percent still represents a large portion of Americans, and is not worth overlooking.
So how can you protect yourself against credit report errors? The most important thing to do is remain vigilant, and pull your credit report as often you can. You are entitled to one free credit report per year from each of the three major credit bureaus, so what I like to do is pull one every four months. If you’re already doing this, you’re well ahead of the game — a separate study by the Consumer Financial Protection Bureau found that only one in five consumers check their credit reports at all!
If you missed the 60 Minutes piece on Sunday night, the link to the video is above; if you’d prefer not to watch the whole thing, you can skim through the transcript here.
And now, here are the other headlines for the week:
Working through college
When we talk about paying for college and the burden of student debt, one of the things we don’t always discuss is the possibility of working through college. Sure, it was a common thing to do when college costs were a bit lower — say, back when I was in school — but it’s become increasingly difficult for kids to work enough to pay for their education AND graduate in four years. Over the weekend, a New York Times piece addressed this issue by highlighting the benefits and difficulties of balancing a steady job and full-time coursework. As the article points out, a part-time job can be a great strategy to pay for books and food. However, there are other factors students need to consider before they hinge their tuition payment strategy on that job: namely, how much they can reasonably make (a waiter in New York City will make twice as much as one in a more rural area), and whether or not they can work and still finish their degree in four years. That job may not be worth it if it means a fifth year of tuition.
Is the latest really the greatest?
As hours-long lines at the Apple store have shown us, when it comes to the technology we love, we don’t hesitate to run to the store to get the latest model or newest toy. After all, the newer, the better — right? Well, according to a recent CNN article, not so much. In fact, there are several tech toys whose older models might actually be better than their newer counterparts. I know, it’s hard to believe, but consider the following: the iPhone 4S is $99, while the newer iPhone 5 retails for $199. And unless you can’t stand the size of the 4S screen, you’re not going to get many updated features with the 5, so it’s worth the 50% savings to go with the older model. This is just one example of why it pays to resist the allure of “new” — the CNN article has several other scenarios in which an older, not-so-inferior model can save you upwards of 25%. Is this enough of a savings to keep you from the “new releases” section at your local electronics store?
Valentine’s Day savings
Do you have plans to spend money on your loved one this Valentine’s Day? If you do, you’re not alone: a National Retail Federation survey predicts we will spend more than $130 on our special someones this Thursday. In my opinion, that’s a lot of money, especially considering we’re barely a month and a half removed from our holiday spending sprees. To that end, I wanted to share this Kiplinger article with you, because it has some great tips on saving money on flowers (the number one Valentine’s Day gift, of course). Of all the tips, the one I like the most is this: “Sometimes less is more. A single long-stem rose can be a romantic gesture.” I couldn’t agree more. In fact, I’ll take it a step farther: who needs a fancy, expensive night on the town when you could have a quiet night in with a favorite homemade meal and heartfelt card? That’s what I’m planning on doing this Thursday, and I couldn’t be happier!
Have a great week!
Jean
