荟萃记者编辑的高招，华尔街日报教你如何在经济寒冬下的2009年省钱
How to Fix Your Life in 2009
Whew!
Last year at this time, we were wondering if it could get any worse.
It did. Trouble in the subprime market exploded into an across-the-board rout. The credit crunch evolved into a global financial crisis. Markets tanked. Mighty institutions fell. Recession took hold. Layoffs began to mount just as the holiday season got under way. Few people have been left untouched. And still, we don't know if we're through the worst of it.
If you're living in a house worth less than you owe on it, you aren't alone. Ditto if your retirement savings are down by double digits. Or if you're earning nearly zero interest on your savings, and yet unable to borrow at historically low rates. Or if you're looking for a job or worried about keeping the one you have.
[Fix Your Life] Lisa Haney
All of which has given rise to the newest new normal. Exuberance and excess have made way for prudence and pragmatism. Frugality is, once again, a virtue. To help you settle into this strange new world, our reporters have dug deep into their beats. Modeled on Personal Journal's regular Quick Fix feature, the advice here covers a lot of ground, but shares a common theme: helping you make your dollars work harder.
Problem: Your older-model computer sucks up electricity.
Solution: Energy-management software lets you put your computer on a schedule to reduce the amount of electricity it uses.
Verdiem, a Seattle-based company that makes energy-management computer software for businesses, recently released a consumer-grade version of its software called Edison. The free software lets you set your computer on working and nonworking schedules. It also provides estimated savings reports that show how much carbon dioxide has been saved. It works on computers running Windows XP and Vista. (www.verdiem.com)
The Environmental Protection Agency (www.energystar.gov) also has a free energy-management program called EZ Wizard for computers running Windows 2000 or Windows XP. Google Desktop users can download a free plug-in called Energy Saver that works on Windows XP and Vista, but to use it you must first download Google Desktop at www.desktop.google.com/plugins.
—Joseph De Avila
Problem: You want to apply for new credit, but aren't sure if your credit is good enough.
Solution: Get a free credit score. Several Web sites -- Credit.com, CreditKarma.com and Quizzle.com -- allow consumers to check their credit scores free. Although CreditKarma and Quizzle offer scores developed by the credit-reporting companies, including TransUnion and Experian, and not the widely used FICO score developed by Fair Isaac Corp., they can still provide users with a quick snapshot of where they stand. At CreditKarma.com, consumers can estimate how certain actions -- such as applying for a new card, being late on a payment or paying on time -- will change their score.
It's also a good idea to check your detailed credit reports at least once a year, which you can do free of charge at annualcreditreport.com.
—Jane J. Kim
Problem: You're drowning in credit-card debt.
Solution: Consider working with a nonprofit credit-counseling agency. Consumers seeking help with debt need to tread carefully. As Americans' credit-card bills have spiraled out of control, the airwaves have filled with advertisements for "debt-settlement" services that say they'll help consumers settle debts for a fraction of what they owe. But they often charge high up-front fees, and their strategies can drag down clients' credit scores and even make their debt burden balloon.
Nonprofit credit-counseling agencies offer a different approach. After reviewing your financial situation, the agency may offer you a debt-management plan, which will help you steadily pay down the full amount owed over a period of roughly three to five years. Creditors will often reduce interest charges or waive fees for consumers participating in these plans.
A good place to start looking for a nonprofit credit counseling agency is www.debtadvice.org, a Web site maintained by the National Foundation for Credit Counseling. The NFCC sets guidelines on fees that member agencies can charge consumers and requires agencies to provide services free of charge if a consumer can't afford to pay. To find NFCC member agencies, click on "find a counselor now."
—Eleanor Laise
Problem: Those four-inch heels that cost a mint are too high to walk in.
Solution: Trim down those heels. Ask any veteran stiletto wearer. She most likely has a few pairs of high heels that she hardly ever wears because they hurt too much. An expert shoe-repair shop might be able to cut heels down to size. Shoe-repair specialists say that with few exceptions, they can shorten most stilettos by up to half an inch, the maximum amount allowed to maintain the shoe's original pitch and alignment.
"Even one-fourth inch can make a big difference to reduce the pressure on the ball of your foot," says Randy Lipson, owner of Cobblestone Quality Shoe Repair in St. Louis, which charges between $8 and $15 to cut down high heels. He does this by taking the heel apart, removing the metal rod inside the high heel, shaving it down and reattaching the heel to the shoe.
—Teri Agins
Problem: Your job hunt is hitting a dead end.
Solution: Start by researching your online reputation. Enter your name into search engines to see what employers might find. If you have a profile on a social-networking site, such as Facebook or MySpace, be sure to remove any inappropriate photos or comments. Invest time in networking: Studies show that most jobs are filled through referrals. Inform friends, family, former colleagues, alumni, fellow parishioners and others that you're looking for work and that you'd welcome their help. Attend business events, such as industry conferences and seminars that cater to your career field. Create profiles on career-related networking sites, such as LinkedIn, ExecuNet and Plaxo, and participate in discussion boards to develop online relationships.
Meanwhile, consider hiring a career coach who can critique your résumé and interviewing skills and suggest ways to improve them.
—Sarah E. Needleman
Problem: Your health plan refuses to cover a medical treatment.
Solution: Appeal the rejection. Start out by calling the insurer to see if the problem is a simple billing or procedural mistake that can be easily corrected. If not, appeal the decision. Most disputes center on one of two issues: whether your care is medically necessary, or whether it is something that's covered under your plan.
Either way, you'll want to secure copies of key insurance documents, including the denial letter and a full explanation of your plan's benefits, often called the "Evidence of Coverage." That will help you understand what's supposed to be paid for by your insurer. If your appeal centers on medical necessity, enlist the help of your doctor, who can write a letter explaining why you needed the treatment. You should also try to find medical studies backing your case.
If the health plan upholds its denial, you may have other places to turn. Most states have an outside review process for health-insurance appeals, though not all appeals are eligible. For more detailed advice about filing a health-insurance appeal, try the Web sites of the Kaiser Family Foundation and the Patient Advocate Foundation.
—Anna Wilde Mathews
Problem: You want to buy organic and name-brand foods without breaking the bank.
Solution: Take advantage of coupons. For those who don't want to go through the hassle of coupon-hunting through circulars, there are a number of Web-based services that offer them. Smartsource.com, coolsavings.com, and ppgazette.com link to the same coupons -- primarily for snack and personal-care products, such as Totino's Pizza Rolls and Bausch & Lomb ReNu contact lens solution -- and allow users to print them directly from the site. But with no search tool, locating the coupons you want may be time consuming. Also, coupons usually print only one or two to a page, so you may end up wasting a lot of paper.
Sites such as thecouponclippers.com, grocerycoupons.com, and centsoff.com, clip the coupons from newspaper inserts and mail them to you. They tend to have coupons on a wider assortment of items, including green cleaning products, brand-name goods and health foods. But the service comes at a cost. Some sites take a percentage of the savings offered by the coupons, while others charge a flat membership fee. Make sure the coupon bargains outweigh the cost of the service.
Several manufacturers offer coupons for new and popular products on their Web sites. Organic Valley, for instance, offers free and printable $1-off coupons on organic milk, cottage cheese and butter on organicvalley.com. But these sites may still require you to register with your email and mailing address in order to access the coupons.
—Anjali Athavaley
Problem: You need affordable health insurance, fast.
Solution: Comparison-shop online. Healthinsurance.com and eHealthinsurance.com give you detailed estimates of multiple health-insurance plans in your state and what's covered under them. You can apply online -- without having to fork over any medical records -- and in some cases hear back from providers in minutes. Healthinsurance.com also gives estimates for travel insurance and dental coverage. And eHealthinsurance has information on health savings accounts (HSAs) and options for small-business owners. The eHealthinsurance portal for student health insurance is also good for the budget-conscious undergrad or graduate student not covered under a parental policy. Discount cards are offered through the site.
—Mary Pilon
Problem: Your 529 college-savings account has been wiped out, and your teenager will soon head off for college.
Solution: Switch to more-conservative 529 investments, such as money-market mutual funds and CDs, to preserve what you have. Investors have typically been allowed to make one investment change per calendar year, but if you've already made one change this year, you can change it immediately if you change the plan's beneficiary or roll over the money to another 529 savings or prepaid plan. For 2009, the IRS issued a special rule that allows investors to make investment changes in their 529 plans twice a year. There is a risk, however, that people might tinker too much with their investments, says Mark Kantrowitz, publisher of FinAid.org. "If you pull out now, you're locking in losses," he says.
If possible, wait until your teenager is in his third or fourth year of college before you tap the plan so that you give the investments time to recover. If your plan is under water, you can also cash out without penalty or taxes (though you may have to pay state taxes if you got a state tax deduction for contributions) and possibly count the loss as a miscellaneous itemized deduction.
—Jane J. Kim
Problem: You're getting hit with overdraft and late fees at your bank.
Solution: Sign up for alerts from your bank. Many banks, including Bank of America, Wells Fargo and Citibank, will offer to send you email or cellphone text alerts when your balances fall below a specific threshold. PNC Bank's new checking account, called "Virtual Wallet," combines checking, savings and high-yield-savings accounts and lets users program "Danger Days" that warn them when too much money has been drawn out. Another option is to sign up for a transfer service that will automatically tap a savings account or a line of credit or a credit card in case there is an overdraft in the checking account. You may pay a fee, plus interest on outstanding loans, for each transfer, although the costs should still be lower than an overdraft or bounced-check fee.
Consumers can also take advantage of free personal-finance Web sites, such as Mint.com, Wesabe.com, and QuickenOnline.com, that will break out the fees you pay in your checking account and offer tips on how to avoid those fees. Or, for those who ditch the bank altogether, brokerage firms can offer a lower-cost checking-account alternative. Account holders at Fidelity, for example, can link their checking-account held there to their brokerage account; any overdrafts will automatically pull money, as needed and without fees, from the cash portion of your brokerage account.
—Jane J. Kim
Problem: Your Individual Retirement Account has plummeted in value.
Solution: Convert what's left to a Roth IRA. When you roll over traditional IRA assets to a Roth, you have to pay the income taxes up front on the account's value -- but those values, and income-tax rates, are both relatively low at the moment, says Ed Slott, an IRA consultant in Rockville Centre, N.Y.
With a Roth account, there are generally no taxes on withdrawals or any future earnings, unlike with traditional IRAs. There's also no mandatory distribution schedule -- again in contrast with traditional IRAs, from which account holders must begin taking minimum distributions by April 1 of the year following the year they turn 70½ years old.
Converting to a Roth could work well either as a year-end fix or as a way to plan ahead: Legislation approved by Congress earlier this month waives any required withdrawals from traditional IRAs for 2009. That means you could roll over assets from a traditional IRA to a Roth without having to first take a mandatory distribution. So more of your assets could wind up protected from future taxes and withdrawal requirements, Mr. Slott says.
One other advantage: You can leave a Roth account intact for your heirs. Heirs other than your spouse would have to take required withdrawals each year, but they generally wouldn't owe tax on those withdrawals.
To be eligible to convert traditional IRA assets to a Roth, your modified adjusted gross income must be no more than $100,000 a year, either for an individual or a married couple filing jointly. Neither a required IRA distribution nor the converted amount would count against that limit, but they still count as taxable income. See IRS Publication 590, at irs.gov, for more information about traditional and Roth IRAs.
—Kelly Greene
Problem: Someone posted embarrassing photos of you on Facebook or MySpace.
Solution: "Untag" your photo or block who can see your photos.
Tagging is used in Facebook to tell users who is in a photo. If someone posts and tags you in an unflattering photo, you have some options. One thing you can do is de-tag the photo. You do this by going to the page that has the photo and clicking on the "de-tag" link next to your name. The photo can still be viewed in the photo album of the person who uploaded it, so if you are really worried about the photo, you should contact the person who posted it and ask them to take it down.
Another option is to tweak the settings on your profile's privacy settings. Under the section titled "Photos Tagged of You," specify which groups or friends can view your photos. If you use Facebook for professional networking, you may want to limit who can see your private photos.
On MySpace, if one of your friends tags you in a photo, the site sends you a message asking for your permission to allow it. If you decline to be tagged, your name won't be associated with the photo. But friends of the person who posted the photo will still be able to see it. If you do accept to be tagged, you can de-tag yourself later by going to the photo's page and clicking on the red "X" next to your name.
As a last resort, you can ask MySpace to take down a photo. Each photo page has a link to report a photo. MySpace will remove photos on a case-by-case basis. Facebook only removes photos that violate its terms of service.
—Joseph De Avila
Problem: You don't know how much money to stash away for your child's future college tuition.
Solution: Develop a savings plan. The encyclopedic financial-aid Web site FinAid.org has a section with more than 50 calculators, but the "savings plan designer" is among the most useful. It shows exactly how much you should plunk into an interest-bearing account each month in order to reach a certain savings goal. It also asks how much you've already saved and what the interest rate on those savings has been. Then you punch in how many years you have before your child enrolls, and how frequently you want to contribute.
Experts say parents who are financially able should generally expect to pay at least half to two-thirds of their children's college costs through a combination of savings, current income and loans. According to the calculator, someone with $20,000 saved up already and with 18 years to go before the child graduates should aim to contribute $818.25 a month to cover half of projected costs at a private college, making certain assumptions.
—Anne Marie Chaker
Problem: You're too nervous to invest in the stock market, but your bank is offering paltry yields on CDs.
Solution: Auction your cash to the highest bidder. At MoneyAisle.com, more than 100 small and midsize banks compete for consumer deposits through live auctions. When a customer comes to the site and asks for the terms of a CD or high-yield savings account, the banks bid against one another -- through automated auction software that runs on the Web site -- to win the deposit. The cost is free to consumers, and you don't have to commit to investing anything before you see the results of an auction. Participating banks, which are all FDIC-insured, are screened by an independent bank-rating agency to filter out the riskiest banks.
Savers can also find high-yield CDs with brokered CDs, which are offered by banks and brokerage firms around the country, and typically sold through brokerage firms and financial intermediaries. As the big brokerage firms expand their deposit business, many -- including Morgan Stanley and Merrill Lynch -- are offering attractive yields to lure buyers. Keep in mind that brokered CDs have different rules. If you cash out before they mature, you may lose some of your principal.
—Jane J. Kim
Problem: You need to find a new job but haven't updated your résumé in more than five years.
Solution: Use a professional résumé writer -- but take the time to shop carefully. Ask for sample résumés, making sure they look customized and not like cookie-cutter templates. Contact previous customers to verify claims of professional prowess. If you would rather save money and do it yourself, consider starting with an objective statement that specifies what kind of work you're seeking. Then outline your work history by showing accomplishments for each assignment that demonstrate how you've benefited your past employers. When applying for specific positions, tailor the document by highlighting relevant qualifications. For example, if an ad says that the ability to work well in teams is required, make sure to list any group projects you were involved in.
Finally, have someone you trust proofread the document to ensure that it is clear and correct.
—Sarah E. Needleman
Problem: You want to curb medical costs without jeopardizing your health.
Solution: Research what care and preventive measures are truly necessary. While you can skip unnecessary scans and forgo elective plastic surgery, it is important to get the recommended screening tests for cancer and other diseases, as well as immunizations that can prevent illnesses like the flu.
Go to www.ahrq.gov/consumer/index.html to download the government's recommendations, including how often to get your blood pressure checked and when to have a colonoscopy. The U.S. Preventive Services Task Force's recommended tests are generally covered by insurers.
Keep immunizations up to date. The Centers for Disease Control and Prevention now recommend that all adults over age 60 get vaccinated against herpes zoster, or shingles. You can download its 2008 recommended adult immunization schedule at www.cdc.gov/vaccines/recs/schedules/adult-schedule.htm.
Skipping medications can be especially dangerous, so talk to your pharmacist about whether a cheaper generic brand is available, or whether it is safe to split pills. There are also medication-assistance programs for which you may qualify; check needymeds.org.
—Laura Landro
Problem: You work indoors, live in a cold climate and wear sunscreen to protect your skin -- and you wonder if you're getting enough vitamin D.
Solution: Have your vitamin D level checked. Experts think many people aren't getting enough these days, and that can put you at higher risk for a variety of problems, including osteoporosis, heart attacks, high blood pressure, multiple sclerosis, macular degeneration, mental illness, chronic pain and many cancers. Your doctor can check your D level with a blood test, which costs about $100 and is usually covered by insurance. Make sure the test measures 25-hydroxyvitamin D, not 1, 25-dihydroxyvitamin D. A concentration of less than 20 nanograms per milliliter is considered deficient, and more than 30 npm is healthier.
If you are low, you can boost your level with inexpensive supplements. Current U.S. guidelines call for 200 international units per day from birth through age 50; 400 IUs from 51 through 70 and 600 IUs from age 71 on. Many medical organizations now think that's too low. The American Academy of Pediatrics says children should have 400 IUs a day, and the National Osteroporsis Foundation thinks adults over age 50 should have at least 800 to 1,000.
In most of the U.S., being in the sun for at least 20 minutes a day can boost your D level nicely but also raise your risk of developing skin cancer.
—Melinda Beck
Problem: Your produce spoils before you can finish it.
Solution: Optimize how you choose and store your food. How long produce lasts depends on the shape it's in when you buy it, experts say. Be careful not to pick fruits and vegetables that are bruised or damaged. And make sure the supermarket is the last stop on your trip home, so that groceries don't get warm sitting in the car.
Storing produce correctly makes a difference in shelf life. Fruits and vegetables, for example, should be stored separately in a refrigerator so that ethylene gas released by certain fruits doesn't accelerate the ripening of the vegetables. Items such as tomatoes and bananas are best kept at room temperature. Food-science experts say it is also a good idea to rotate the food in your fridge so that the items that are more perishable are at the front and get consumed first. If you notice fruits or vegetables growing mold, toss them out immediately so that they don't contaminate other foods in your produce bins.
—Anjali Athavaley
Problem: You need more money for college quickly and don't know where to turn.
Solution: Look for scholarships. Peruse the scholarship offerings online from the College Board (collegeboard.com), Scholarships.com and Fastweb.com. Many have grants that have rolling deadlines and easy, online applications.
If you're maxed out on lower-interest federal loans, consider comparison shopping with SimpleTution.com or StudentLoanMonkey.com. The sites allow prospective students to shop around for student loans and avoid a hard inquiry on their credit reports. As the credit crunch has crimped student borrowing and increased interest rates on private loans, SimpleTuition and StudentLoanMonkey will show you available offers from a wide swath of lenders, not just ones that market heavily.
—Mary Pilon
Problem: You need to find more ways to tighten your budget.
Solution: Check out new Web sites that help reduce your monthly bills. BillShrink.com helps consumers save money by finding tailored deals on cellphone plans and credit cards based on their individual needs. The site, which will analyze a consumer's spending patterns, credit score and any existing credit-card balances, will suggest the best credit card to maximize rewards or lower fees and interest rates. If you're looking for a lower-cost cellphone plan, the site searches through plans from all the major carriers and returns the best matches, based on how many minutes you use each month and where you live and work. Another recently launched site, ratesurfer.com, will alert you when rates change on your credit-card accounts and, if you let it, will move your balances between accounts to make sure you're paying the least amount of interest. At SmartHippo.com, homebuyers can review and rank lenders and compare mortgage rates with rates that other people with similar risk profiles have obtained.
Other free personal-finance Web sites and many banks will provide consumers with a snapshot of all of their bills in one place while also providing budgeting tools to help them keep track of their spending.
—Jane J. Kim
Problem: You're lost, you don't have a map, and you need directions.
Solution: Use your cellphone to get directions by text message. There are several free services available that will send you directions, and you don't need a fancy phone like a Blackberry or an iPhone. To use Google's service, send a text to 466-453. (It spells "Google.") In the body of the text, include your starting location followed by your destination. (for example Second St. and Third Ave. NY NY to 45th St. and 8th Ave. NY NY) You will then receive multiple text messages with driving directions to your destination. The number of texts that you will receive depends on how many steps are included in the directions.
If you are already behind the wheel, avoid texting and call 347-328-4667 (It spells "directions."). With this program, you tell an automated service where you are and where your destination is. After this, you'll get several text messages with your directions. While these services are free, you may incur charges under your cellphone plan.
—Joseph De Avila
Problem: Your employer just suspended its 401(k) matching contribution.
Solution: Save more, and consider an individual retirement account. Companies slammed by the economic downturn, like General Motors Corp., have been suspending their 401(k) matching contributions. While the match may have been a major force motivating you to contribute to the plan, your employer's cost cutting doesn't give you an excuse to cut back on your own saving.
First, make sure you've established an emergency fund outside the 401(k). It's always a good idea to have about six months' worth of living expenses stashed away in cash. And since the match suspension may be a sign that your employer is in financial trouble, that emergency fund can help ease anxiety over sudden layoffs.
Ideally, you should also boost your own contributions to the 401(k) to make up for the amount your employer is no longer contributing. "The employee's need to save for retirement doesn't go away just because the match does," says Trisha Brambley, president of Resources for Retirement, a retirement-plan advisory firm in Newtown, Pa.
Explore other tax-deferred savings options as well. The lack of a match puts the 401(k) and IRA on a more equal footing. You might want to save first in the account that gives you the best investment options and lowest fees. But keep in mind that any tax deduction you get for an IRA contribution may be reduced or eliminated if you're covered by an employer retirement plan, depending on your income and tax filing status.
—Eleanor Laise
Problem: You want to minimize those annoying fees that jack up the cost of travel.
Solution: Consider signing up for hotel and airline loyalty programs or credit cards that let you travel without paying some fees. Wyndham Hotel Group, owned by Wyndham Worldwide Corp., and Omni Hotels both let members of their free loyalty programs access wireless Internet at many of their hotels free. (Non-members are charged a daily access fee.) Continental Airlines waives its $15 first-checked bag fee for Continental Chase credit and debit cardholders, and waives its second-checked bag fee for the highest-tier Chase cardholders, though the credit cards have annual fees of up to hundreds of dollars.
Also, some airlines offer a discount on checked-bag fees that are paid in advance on their Web site. For example, United Airlines is offering customers a 20% discount until Jan. 31. on the fee to check a first bag if it's paid for in advance on United.com. Spirit Airlines gives $10 off the first checked bag to those who prepay on its Web site.
—Sarah Nassauer
Problem: You're overwhelmed by unpaid hospital bills.
Solution: Your hospital may be willing to give you a discount on the bill in exchange for your agreeing to set up a payment plan or pay some costs up front. If you're uninsured, appeal to your hospital's sense of fairness, noting that the uninsured are frequently charged far more than the insured for the same services.
Also, request a copy of your hospital's financial-assistance policies and look into charity care. If you qualify for Medicaid, the program often pays for care retroactively. Seek help from consumer groups. Some organizations include the Medical Billing Advocates of America, Access Project and Patient Advocate Foundation.
Try to avoid putting medical bills on credit cards or using home loans to pay them off. The consequences of not paying credit-card companies or home lenders -- such as high interest rates or even foreclosure -- can be greater than those from not paying hospitals.
If collection agencies come calling, promptly send the collector a letter requesting verification of the debt. Then, the collector can't resume collection activities until it sends you confirmation of the debt. You can also write collectors a letter telling them to stop contacting you, though this doesn't mean your debt has gone away. The Federal Trade Commission explains your rights: www.ftc.gov/bcp/edu/pubs/consumer/credit/cre18.shtm.
—Sarah Rubenstein
Problem: You have a load of beaten-down stocks in your portfolio.
Solution: Consider giving some of that stock to your kids. There's a silver lining to stock prices' descent: You can give away more shares tax free. In 2008, an individual can give as much as $12,000 to each gift recipient before getting hit with gift taxes. That amount will rise to $13,000 in 2009. The gift helps reduce the size of your estate -- probably a good idea since the estate tax isn't likely to go away soon, financial advisers say. It also may allow the recipients to enjoy a nice rebound from today's depressed stock prices over the long haul.
Another approach: Consider a grantor retained annuity trust, or GRAT. You can put your beaten-down stock in the GRAT, name your children as beneficiaries, and receive an annuity from the trust based on a percentage of what you contributed. As long as you survive the trust term, often just a couple of years, any stock appreciation beyond a "hurdle rate" set by the government passes to the beneficiaries tax-free. That hurdle rate, currently 3.4%, is at historically low levels, and it's set to move even lower.
"If you ever thought of making lemonade out of lemons, this is the time to actually do it," says Bill Forsyth, senior fiduciary counsel at wealth-management firm Bessemer Trust.
—Eleanor Laise
Copyright 2008 Dow Jones & Company, Inc. All Rights Reserved
How to Fix Your Life in 2009
Whew!
Last year at this time, we were wondering if it could get any worse.
It did. Trouble in the subprime market exploded into an across-the-board rout. The credit crunch evolved into a global financial crisis. Markets tanked. Mighty institutions fell. Recession took hold. Layoffs began to mount just as the holiday season got under way. Few people have been left untouched. And still, we don't know if we're through the worst of it.
If you're living in a house worth less than you owe on it, you aren't alone. Ditto if your retirement savings are down by double digits. Or if you're earning nearly zero interest on your savings, and yet unable to borrow at historically low rates. Or if you're looking for a job or worried about keeping the one you have.
[Fix Your Life] Lisa Haney
All of which has given rise to the newest new normal. Exuberance and excess have made way for prudence and pragmatism. Frugality is, once again, a virtue. To help you settle into this strange new world, our reporters have dug deep into their beats. Modeled on Personal Journal's regular Quick Fix feature, the advice here covers a lot of ground, but shares a common theme: helping you make your dollars work harder.
Problem: Your older-model computer sucks up electricity.
Solution: Energy-management software lets you put your computer on a schedule to reduce the amount of electricity it uses.
Verdiem, a Seattle-based company that makes energy-management computer software for businesses, recently released a consumer-grade version of its software called Edison. The free software lets you set your computer on working and nonworking schedules. It also provides estimated savings reports that show how much carbon dioxide has been saved. It works on computers running Windows XP and Vista. (www.verdiem.com)
The Environmental Protection Agency (www.energystar.gov) also has a free energy-management program called EZ Wizard for computers running Windows 2000 or Windows XP. Google Desktop users can download a free plug-in called Energy Saver that works on Windows XP and Vista, but to use it you must first download Google Desktop at www.desktop.google.com/plugins.
—Joseph De Avila
Problem: You want to apply for new credit, but aren't sure if your credit is good enough.
Solution: Get a free credit score. Several Web sites -- Credit.com, CreditKarma.com and Quizzle.com -- allow consumers to check their credit scores free. Although CreditKarma and Quizzle offer scores developed by the credit-reporting companies, including TransUnion and Experian, and not the widely used FICO score developed by Fair Isaac Corp., they can still provide users with a quick snapshot of where they stand. At CreditKarma.com, consumers can estimate how certain actions -- such as applying for a new card, being late on a payment or paying on time -- will change their score.
It's also a good idea to check your detailed credit reports at least once a year, which you can do free of charge at annualcreditreport.com.
—Jane J. Kim
Problem: You're drowning in credit-card debt.
Solution: Consider working with a nonprofit credit-counseling agency. Consumers seeking help with debt need to tread carefully. As Americans' credit-card bills have spiraled out of control, the airwaves have filled with advertisements for "debt-settlement" services that say they'll help consumers settle debts for a fraction of what they owe. But they often charge high up-front fees, and their strategies can drag down clients' credit scores and even make their debt burden balloon.
Nonprofit credit-counseling agencies offer a different approach. After reviewing your financial situation, the agency may offer you a debt-management plan, which will help you steadily pay down the full amount owed over a period of roughly three to five years. Creditors will often reduce interest charges or waive fees for consumers participating in these plans.
A good place to start looking for a nonprofit credit counseling agency is www.debtadvice.org, a Web site maintained by the National Foundation for Credit Counseling. The NFCC sets guidelines on fees that member agencies can charge consumers and requires agencies to provide services free of charge if a consumer can't afford to pay. To find NFCC member agencies, click on "find a counselor now."
—Eleanor Laise
Problem: Those four-inch heels that cost a mint are too high to walk in.
Solution: Trim down those heels. Ask any veteran stiletto wearer. She most likely has a few pairs of high heels that she hardly ever wears because they hurt too much. An expert shoe-repair shop might be able to cut heels down to size. Shoe-repair specialists say that with few exceptions, they can shorten most stilettos by up to half an inch, the maximum amount allowed to maintain the shoe's original pitch and alignment.
"Even one-fourth inch can make a big difference to reduce the pressure on the ball of your foot," says Randy Lipson, owner of Cobblestone Quality Shoe Repair in St. Louis, which charges between $8 and $15 to cut down high heels. He does this by taking the heel apart, removing the metal rod inside the high heel, shaving it down and reattaching the heel to the shoe.
—Teri Agins
Problem: Your job hunt is hitting a dead end.
Solution: Start by researching your online reputation. Enter your name into search engines to see what employers might find. If you have a profile on a social-networking site, such as Facebook or MySpace, be sure to remove any inappropriate photos or comments. Invest time in networking: Studies show that most jobs are filled through referrals. Inform friends, family, former colleagues, alumni, fellow parishioners and others that you're looking for work and that you'd welcome their help. Attend business events, such as industry conferences and seminars that cater to your career field. Create profiles on career-related networking sites, such as LinkedIn, ExecuNet and Plaxo, and participate in discussion boards to develop online relationships.
Meanwhile, consider hiring a career coach who can critique your résumé and interviewing skills and suggest ways to improve them.
—Sarah E. Needleman
Problem: Your health plan refuses to cover a medical treatment.
Solution: Appeal the rejection. Start out by calling the insurer to see if the problem is a simple billing or procedural mistake that can be easily corrected. If not, appeal the decision. Most disputes center on one of two issues: whether your care is medically necessary, or whether it is something that's covered under your plan.
Either way, you'll want to secure copies of key insurance documents, including the denial letter and a full explanation of your plan's benefits, often called the "Evidence of Coverage." That will help you understand what's supposed to be paid for by your insurer. If your appeal centers on medical necessity, enlist the help of your doctor, who can write a letter explaining why you needed the treatment. You should also try to find medical studies backing your case.
If the health plan upholds its denial, you may have other places to turn. Most states have an outside review process for health-insurance appeals, though not all appeals are eligible. For more detailed advice about filing a health-insurance appeal, try the Web sites of the Kaiser Family Foundation and the Patient Advocate Foundation.
—Anna Wilde Mathews
Problem: You want to buy organic and name-brand foods without breaking the bank.
Solution: Take advantage of coupons. For those who don't want to go through the hassle of coupon-hunting through circulars, there are a number of Web-based services that offer them. Smartsource.com, coolsavings.com, and ppgazette.com link to the same coupons -- primarily for snack and personal-care products, such as Totino's Pizza Rolls and Bausch & Lomb ReNu contact lens solution -- and allow users to print them directly from the site. But with no search tool, locating the coupons you want may be time consuming. Also, coupons usually print only one or two to a page, so you may end up wasting a lot of paper.
Sites such as thecouponclippers.com, grocerycoupons.com, and centsoff.com, clip the coupons from newspaper inserts and mail them to you. They tend to have coupons on a wider assortment of items, including green cleaning products, brand-name goods and health foods. But the service comes at a cost. Some sites take a percentage of the savings offered by the coupons, while others charge a flat membership fee. Make sure the coupon bargains outweigh the cost of the service.
Several manufacturers offer coupons for new and popular products on their Web sites. Organic Valley, for instance, offers free and printable $1-off coupons on organic milk, cottage cheese and butter on organicvalley.com. But these sites may still require you to register with your email and mailing address in order to access the coupons.
—Anjali Athavaley
Problem: You need affordable health insurance, fast.
Solution: Comparison-shop online. Healthinsurance.com and eHealthinsurance.com give you detailed estimates of multiple health-insurance plans in your state and what's covered under them. You can apply online -- without having to fork over any medical records -- and in some cases hear back from providers in minutes. Healthinsurance.com also gives estimates for travel insurance and dental coverage. And eHealthinsurance has information on health savings accounts (HSAs) and options for small-business owners. The eHealthinsurance portal for student health insurance is also good for the budget-conscious undergrad or graduate student not covered under a parental policy. Discount cards are offered through the site.
—Mary Pilon
Problem: Your 529 college-savings account has been wiped out, and your teenager will soon head off for college.
Solution: Switch to more-conservative 529 investments, such as money-market mutual funds and CDs, to preserve what you have. Investors have typically been allowed to make one investment change per calendar year, but if you've already made one change this year, you can change it immediately if you change the plan's beneficiary or roll over the money to another 529 savings or prepaid plan. For 2009, the IRS issued a special rule that allows investors to make investment changes in their 529 plans twice a year. There is a risk, however, that people might tinker too much with their investments, says Mark Kantrowitz, publisher of FinAid.org. "If you pull out now, you're locking in losses," he says.
If possible, wait until your teenager is in his third or fourth year of college before you tap the plan so that you give the investments time to recover. If your plan is under water, you can also cash out without penalty or taxes (though you may have to pay state taxes if you got a state tax deduction for contributions) and possibly count the loss as a miscellaneous itemized deduction.
—Jane J. Kim
Problem: You're getting hit with overdraft and late fees at your bank.
Solution: Sign up for alerts from your bank. Many banks, including Bank of America, Wells Fargo and Citibank, will offer to send you email or cellphone text alerts when your balances fall below a specific threshold. PNC Bank's new checking account, called "Virtual Wallet," combines checking, savings and high-yield-savings accounts and lets users program "Danger Days" that warn them when too much money has been drawn out. Another option is to sign up for a transfer service that will automatically tap a savings account or a line of credit or a credit card in case there is an overdraft in the checking account. You may pay a fee, plus interest on outstanding loans, for each transfer, although the costs should still be lower than an overdraft or bounced-check fee.
Consumers can also take advantage of free personal-finance Web sites, such as Mint.com, Wesabe.com, and QuickenOnline.com, that will break out the fees you pay in your checking account and offer tips on how to avoid those fees. Or, for those who ditch the bank altogether, brokerage firms can offer a lower-cost checking-account alternative. Account holders at Fidelity, for example, can link their checking-account held there to their brokerage account; any overdrafts will automatically pull money, as needed and without fees, from the cash portion of your brokerage account.
—Jane J. Kim
Problem: Your Individual Retirement Account has plummeted in value.
Solution: Convert what's left to a Roth IRA. When you roll over traditional IRA assets to a Roth, you have to pay the income taxes up front on the account's value -- but those values, and income-tax rates, are both relatively low at the moment, says Ed Slott, an IRA consultant in Rockville Centre, N.Y.
With a Roth account, there are generally no taxes on withdrawals or any future earnings, unlike with traditional IRAs. There's also no mandatory distribution schedule -- again in contrast with traditional IRAs, from which account holders must begin taking minimum distributions by April 1 of the year following the year they turn 70½ years old.
Converting to a Roth could work well either as a year-end fix or as a way to plan ahead: Legislation approved by Congress earlier this month waives any required withdrawals from traditional IRAs for 2009. That means you could roll over assets from a traditional IRA to a Roth without having to first take a mandatory distribution. So more of your assets could wind up protected from future taxes and withdrawal requirements, Mr. Slott says.
One other advantage: You can leave a Roth account intact for your heirs. Heirs other than your spouse would have to take required withdrawals each year, but they generally wouldn't owe tax on those withdrawals.
To be eligible to convert traditional IRA assets to a Roth, your modified adjusted gross income must be no more than $100,000 a year, either for an individual or a married couple filing jointly. Neither a required IRA distribution nor the converted amount would count against that limit, but they still count as taxable income. See IRS Publication 590, at irs.gov, for more information about traditional and Roth IRAs.
—Kelly Greene
Problem: Someone posted embarrassing photos of you on Facebook or MySpace.
Solution: "Untag" your photo or block who can see your photos.
Tagging is used in Facebook to tell users who is in a photo. If someone posts and tags you in an unflattering photo, you have some options. One thing you can do is de-tag the photo. You do this by going to the page that has the photo and clicking on the "de-tag" link next to your name. The photo can still be viewed in the photo album of the person who uploaded it, so if you are really worried about the photo, you should contact the person who posted it and ask them to take it down.
Another option is to tweak the settings on your profile's privacy settings. Under the section titled "Photos Tagged of You," specify which groups or friends can view your photos. If you use Facebook for professional networking, you may want to limit who can see your private photos.
On MySpace, if one of your friends tags you in a photo, the site sends you a message asking for your permission to allow it. If you decline to be tagged, your name won't be associated with the photo. But friends of the person who posted the photo will still be able to see it. If you do accept to be tagged, you can de-tag yourself later by going to the photo's page and clicking on the red "X" next to your name.
As a last resort, you can ask MySpace to take down a photo. Each photo page has a link to report a photo. MySpace will remove photos on a case-by-case basis. Facebook only removes photos that violate its terms of service.
—Joseph De Avila
Problem: You don't know how much money to stash away for your child's future college tuition.
Solution: Develop a savings plan. The encyclopedic financial-aid Web site FinAid.org has a section with more than 50 calculators, but the "savings plan designer" is among the most useful. It shows exactly how much you should plunk into an interest-bearing account each month in order to reach a certain savings goal. It also asks how much you've already saved and what the interest rate on those savings has been. Then you punch in how many years you have before your child enrolls, and how frequently you want to contribute.
Experts say parents who are financially able should generally expect to pay at least half to two-thirds of their children's college costs through a combination of savings, current income and loans. According to the calculator, someone with $20,000 saved up already and with 18 years to go before the child graduates should aim to contribute $818.25 a month to cover half of projected costs at a private college, making certain assumptions.
—Anne Marie Chaker
Problem: You're too nervous to invest in the stock market, but your bank is offering paltry yields on CDs.
Solution: Auction your cash to the highest bidder. At MoneyAisle.com, more than 100 small and midsize banks compete for consumer deposits through live auctions. When a customer comes to the site and asks for the terms of a CD or high-yield savings account, the banks bid against one another -- through automated auction software that runs on the Web site -- to win the deposit. The cost is free to consumers, and you don't have to commit to investing anything before you see the results of an auction. Participating banks, which are all FDIC-insured, are screened by an independent bank-rating agency to filter out the riskiest banks.
Savers can also find high-yield CDs with brokered CDs, which are offered by banks and brokerage firms around the country, and typically sold through brokerage firms and financial intermediaries. As the big brokerage firms expand their deposit business, many -- including Morgan Stanley and Merrill Lynch -- are offering attractive yields to lure buyers. Keep in mind that brokered CDs have different rules. If you cash out before they mature, you may lose some of your principal.
—Jane J. Kim
Problem: You need to find a new job but haven't updated your résumé in more than five years.
Solution: Use a professional résumé writer -- but take the time to shop carefully. Ask for sample résumés, making sure they look customized and not like cookie-cutter templates. Contact previous customers to verify claims of professional prowess. If you would rather save money and do it yourself, consider starting with an objective statement that specifies what kind of work you're seeking. Then outline your work history by showing accomplishments for each assignment that demonstrate how you've benefited your past employers. When applying for specific positions, tailor the document by highlighting relevant qualifications. For example, if an ad says that the ability to work well in teams is required, make sure to list any group projects you were involved in.
Finally, have someone you trust proofread the document to ensure that it is clear and correct.
—Sarah E. Needleman
Problem: You want to curb medical costs without jeopardizing your health.
Solution: Research what care and preventive measures are truly necessary. While you can skip unnecessary scans and forgo elective plastic surgery, it is important to get the recommended screening tests for cancer and other diseases, as well as immunizations that can prevent illnesses like the flu.
Go to www.ahrq.gov/consumer/index.html to download the government's recommendations, including how often to get your blood pressure checked and when to have a colonoscopy. The U.S. Preventive Services Task Force's recommended tests are generally covered by insurers.
Keep immunizations up to date. The Centers for Disease Control and Prevention now recommend that all adults over age 60 get vaccinated against herpes zoster, or shingles. You can download its 2008 recommended adult immunization schedule at www.cdc.gov/vaccines/recs/schedules/adult-schedule.htm.
Skipping medications can be especially dangerous, so talk to your pharmacist about whether a cheaper generic brand is available, or whether it is safe to split pills. There are also medication-assistance programs for which you may qualify; check needymeds.org.
—Laura Landro
Problem: You work indoors, live in a cold climate and wear sunscreen to protect your skin -- and you wonder if you're getting enough vitamin D.
Solution: Have your vitamin D level checked. Experts think many people aren't getting enough these days, and that can put you at higher risk for a variety of problems, including osteoporosis, heart attacks, high blood pressure, multiple sclerosis, macular degeneration, mental illness, chronic pain and many cancers. Your doctor can check your D level with a blood test, which costs about $100 and is usually covered by insurance. Make sure the test measures 25-hydroxyvitamin D, not 1, 25-dihydroxyvitamin D. A concentration of less than 20 nanograms per milliliter is considered deficient, and more than 30 npm is healthier.
If you are low, you can boost your level with inexpensive supplements. Current U.S. guidelines call for 200 international units per day from birth through age 50; 400 IUs from 51 through 70 and 600 IUs from age 71 on. Many medical organizations now think that's too low. The American Academy of Pediatrics says children should have 400 IUs a day, and the National Osteroporsis Foundation thinks adults over age 50 should have at least 800 to 1,000.
In most of the U.S., being in the sun for at least 20 minutes a day can boost your D level nicely but also raise your risk of developing skin cancer.
—Melinda Beck
Problem: Your produce spoils before you can finish it.
Solution: Optimize how you choose and store your food. How long produce lasts depends on the shape it's in when you buy it, experts say. Be careful not to pick fruits and vegetables that are bruised or damaged. And make sure the supermarket is the last stop on your trip home, so that groceries don't get warm sitting in the car.
Storing produce correctly makes a difference in shelf life. Fruits and vegetables, for example, should be stored separately in a refrigerator so that ethylene gas released by certain fruits doesn't accelerate the ripening of the vegetables. Items such as tomatoes and bananas are best kept at room temperature. Food-science experts say it is also a good idea to rotate the food in your fridge so that the items that are more perishable are at the front and get consumed first. If you notice fruits or vegetables growing mold, toss them out immediately so that they don't contaminate other foods in your produce bins.
—Anjali Athavaley
Problem: You need more money for college quickly and don't know where to turn.
Solution: Look for scholarships. Peruse the scholarship offerings online from the College Board (collegeboard.com), Scholarships.com and Fastweb.com. Many have grants that have rolling deadlines and easy, online applications.
If you're maxed out on lower-interest federal loans, consider comparison shopping with SimpleTution.com or StudentLoanMonkey.com. The sites allow prospective students to shop around for student loans and avoid a hard inquiry on their credit reports. As the credit crunch has crimped student borrowing and increased interest rates on private loans, SimpleTuition and StudentLoanMonkey will show you available offers from a wide swath of lenders, not just ones that market heavily.
—Mary Pilon
Problem: You need to find more ways to tighten your budget.
Solution: Check out new Web sites that help reduce your monthly bills. BillShrink.com helps consumers save money by finding tailored deals on cellphone plans and credit cards based on their individual needs. The site, which will analyze a consumer's spending patterns, credit score and any existing credit-card balances, will suggest the best credit card to maximize rewards or lower fees and interest rates. If you're looking for a lower-cost cellphone plan, the site searches through plans from all the major carriers and returns the best matches, based on how many minutes you use each month and where you live and work. Another recently launched site, ratesurfer.com, will alert you when rates change on your credit-card accounts and, if you let it, will move your balances between accounts to make sure you're paying the least amount of interest. At SmartHippo.com, homebuyers can review and rank lenders and compare mortgage rates with rates that other people with similar risk profiles have obtained.
Other free personal-finance Web sites and many banks will provide consumers with a snapshot of all of their bills in one place while also providing budgeting tools to help them keep track of their spending.
—Jane J. Kim
Problem: You're lost, you don't have a map, and you need directions.
Solution: Use your cellphone to get directions by text message. There are several free services available that will send you directions, and you don't need a fancy phone like a Blackberry or an iPhone. To use Google's service, send a text to 466-453. (It spells "Google.") In the body of the text, include your starting location followed by your destination. (for example Second St. and Third Ave. NY NY to 45th St. and 8th Ave. NY NY) You will then receive multiple text messages with driving directions to your destination. The number of texts that you will receive depends on how many steps are included in the directions.
If you are already behind the wheel, avoid texting and call 347-328-4667 (It spells "directions."). With this program, you tell an automated service where you are and where your destination is. After this, you'll get several text messages with your directions. While these services are free, you may incur charges under your cellphone plan.
—Joseph De Avila
Problem: Your employer just suspended its 401(k) matching contribution.
Solution: Save more, and consider an individual retirement account. Companies slammed by the economic downturn, like General Motors Corp., have been suspending their 401(k) matching contributions. While the match may have been a major force motivating you to contribute to the plan, your employer's cost cutting doesn't give you an excuse to cut back on your own saving.
First, make sure you've established an emergency fund outside the 401(k). It's always a good idea to have about six months' worth of living expenses stashed away in cash. And since the match suspension may be a sign that your employer is in financial trouble, that emergency fund can help ease anxiety over sudden layoffs.
Ideally, you should also boost your own contributions to the 401(k) to make up for the amount your employer is no longer contributing. "The employee's need to save for retirement doesn't go away just because the match does," says Trisha Brambley, president of Resources for Retirement, a retirement-plan advisory firm in Newtown, Pa.
Explore other tax-deferred savings options as well. The lack of a match puts the 401(k) and IRA on a more equal footing. You might want to save first in the account that gives you the best investment options and lowest fees. But keep in mind that any tax deduction you get for an IRA contribution may be reduced or eliminated if you're covered by an employer retirement plan, depending on your income and tax filing status.
—Eleanor Laise
Problem: You want to minimize those annoying fees that jack up the cost of travel.
Solution: Consider signing up for hotel and airline loyalty programs or credit cards that let you travel without paying some fees. Wyndham Hotel Group, owned by Wyndham Worldwide Corp., and Omni Hotels both let members of their free loyalty programs access wireless Internet at many of their hotels free. (Non-members are charged a daily access fee.) Continental Airlines waives its $15 first-checked bag fee for Continental Chase credit and debit cardholders, and waives its second-checked bag fee for the highest-tier Chase cardholders, though the credit cards have annual fees of up to hundreds of dollars.
Also, some airlines offer a discount on checked-bag fees that are paid in advance on their Web site. For example, United Airlines is offering customers a 20% discount until Jan. 31. on the fee to check a first bag if it's paid for in advance on United.com. Spirit Airlines gives $10 off the first checked bag to those who prepay on its Web site.
—Sarah Nassauer
Problem: You're overwhelmed by unpaid hospital bills.
Solution: Your hospital may be willing to give you a discount on the bill in exchange for your agreeing to set up a payment plan or pay some costs up front. If you're uninsured, appeal to your hospital's sense of fairness, noting that the uninsured are frequently charged far more than the insured for the same services.
Also, request a copy of your hospital's financial-assistance policies and look into charity care. If you qualify for Medicaid, the program often pays for care retroactively. Seek help from consumer groups. Some organizations include the Medical Billing Advocates of America, Access Project and Patient Advocate Foundation.
Try to avoid putting medical bills on credit cards or using home loans to pay them off. The consequences of not paying credit-card companies or home lenders -- such as high interest rates or even foreclosure -- can be greater than those from not paying hospitals.
If collection agencies come calling, promptly send the collector a letter requesting verification of the debt. Then, the collector can't resume collection activities until it sends you confirmation of the debt. You can also write collectors a letter telling them to stop contacting you, though this doesn't mean your debt has gone away. The Federal Trade Commission explains your rights: www.ftc.gov/bcp/edu/pubs/consumer/credit/cre18.shtm.
—Sarah Rubenstein
Problem: You have a load of beaten-down stocks in your portfolio.
Solution: Consider giving some of that stock to your kids. There's a silver lining to stock prices' descent: You can give away more shares tax free. In 2008, an individual can give as much as $12,000 to each gift recipient before getting hit with gift taxes. That amount will rise to $13,000 in 2009. The gift helps reduce the size of your estate -- probably a good idea since the estate tax isn't likely to go away soon, financial advisers say. It also may allow the recipients to enjoy a nice rebound from today's depressed stock prices over the long haul.
Another approach: Consider a grantor retained annuity trust, or GRAT. You can put your beaten-down stock in the GRAT, name your children as beneficiaries, and receive an annuity from the trust based on a percentage of what you contributed. As long as you survive the trust term, often just a couple of years, any stock appreciation beyond a "hurdle rate" set by the government passes to the beneficiaries tax-free. That hurdle rate, currently 3.4%, is at historically low levels, and it's set to move even lower.
"If you ever thought of making lemonade out of lemons, this is the time to actually do it," says Bill Forsyth, senior fiduciary counsel at wealth-management firm Bessemer Trust.
—Eleanor Laise
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