New Year’s resolutions: so easy to make, so hard to keep. But what if you could make just one financial resolution that would improve your life in four ways?
Here’s how: Make a habit of reading between the lines of your financial statements from your bank, mutual funds, credit card issuers, insurers and mortgage company. Many of these companies, sadly, shroud their products in confusing terminology that requires a linguistic scholar — or at least a person with some time — to decipher.
Learning how to sort through and interpret the financial and legal goop that confuses and abuses can help you…
1. Pay less for your banking. Remember when banks used to offer decent-paying savings accounts and offer lures for banking with them? Read between the lines of their rules to find accounts that waive some charges if you use your debit card so many times a month, pay your bills automatically through checking or direct deposit money to the bank. Keep an eye on changes in these and other areas, such as soaring returned-check charges.
2. Tame your credit monster. In 2015, the average household had $15,355 in credit card debt and paid $6,658 in interest. To get control of your credit in 2016 — a year when rates on credit cards and loans are expected to rise, it’s time to take a hard look at your APR, or annual percentage rate. For a closer look at your credit card habits, look at your statement’s finance charges each month. By making merely the minimum payments, you could wind up paying as much for these as you do for principal. Instead, knock off your debt one card at a time.
3. Be sure that you understand your investment fees and charges. Financial providers love their fees and charge all manners of them — including asset management fees, sales charges, surrender charges and commissions. You need to find them so you can see if you can do better elsewhere.
4. Own the right health insurance. The lowest health insurance premium doesn’t usually represent the lowest cost insurance, thanks to a bevy of other charges. Whatever you do, don’t automatically renew the same health policy without looking — insurers often change their approved providers and services annually.