Resolutions: Save more, reduce debt, shore up job

NEW YORK -- Resolved: I'm going to save more money, pay down my debt, check my credit report, improve my job prospects and review my life insurance. For those too lazy to come up with their own resolutions for the new year, these are the recommendations of consumer experts from around the country.

Save more

Greg McBride, senior financial analyst, Bankrate.com, a publication of Bankrate Inc. in West Palm Beach, Fla.:

"The biggest barrier to saving is not getting into the habit of saving. To start, pay yourself first by setting up direct deposit from your employer or your checking account into a high-yield savings account. Establishing a budget and tracking expenses against your income isn't just a spending strategy, it is also a savings strategy. Once you know where your money is going, you can identify opportunities to further boost savings by trimming expenses. Make sure you take advantage of a high-yielding money market or savings account, where yields still top 5 percent, instead of letting whatever savings you have pile up in your current bank, where yields are often below 1 percent."

Deal with debt

Daniel A. Mica, president and chief executive of the Credit Union National Association, headquartered in Madison, Wis.:

"There is no such thing as 'good' debt or 'bad' debt. There's just debt. The way to get rid of it is to pay off the balance carrying the highest interest rate first, and that's generally a credit card. Then work your way down to the balance with the next highest rate.

"Since we're credit union people, we believe in making it a positive experience. That is, do something that reinforces that you are paying down debt. Say you're going to pay off a card and tighten your belt for five months so you can squeeze out an extra $100 a month toward the debt. In the sixth month, spend at least a part of that $100 on something enjoyable to reward yourself for what you've done. Next month, start in again."

Get that free credit report

Paul Richard, executive director of the not-for-profit Institute of Consumer Financial Education in San Diego, Calif.:

"Since the fall of 2005, consumers nationwide have been eligible to obtain a free copy of their credit report every year from each of the three main credit reporting agencies -- Equifax, Experian and TransUnion. There's a Web site, www.annualcreditreport.com, but we recommend that people call the toll-free number, (877) 322-8228. That's because there are about 50 impostor Web sites out there -- most of them selling subscription credit services -- so it's important that people who want to use the Web site type the name correctly.

"We suggest that people order a different one every four months. That way you're checking your credit year-round. If there are mistakes or inaccuracies, notify the credit bureaus right away. They could be depressing your credit score, which means you may be paying more to borrow than you should. Also look for suspicious activity. It could be an early sign of identity theft."

Improve job prospects

John A. Challenger, chief executive of the Challenger, Gray & Christmas Inc. outplacement firm in Chicago:

"Many people find that when they change jobs, whether voluntarily or involuntarily, they locate their new positions through people they've gotten to know, acquaintances they've developed. You can't expect to stay at one company all your life and rise up the ladder like people used to.

"So go out and join industry professional organizations or alumni associations and get engaged. It's such important career insurance, a way of expanding your Rolodex. Vow to spend 5 to 10 percent of your time working at building relationships in different communities you could be engaged in -- your church, charitable group, professional associations. It may not sound important, but it really is."

Review life insurance

Neal Sullivan, secretary-treasurer of the board of the Independent Insurance Agents and Brokers of New York:

"If you have a policy and it's more than a few years old, sit down with your agent and look it over. The rates on life insurance have come down drastically over the past couple of years, so you probably can get more insurance for the same amount of money -- or the costs will go down for the amount of coverage you have.

"How much do you need? Everybody's situation is different. A lot of new homeowners want enough to protect the family in case something happens, so they get enough to at least cover their mortgage so the spouse and the remaining family members won't be kicked out of their house. That's kind of the baseline. Obviously, you probably need more than that if you have kids, want them to go to college, things like that. Don't think that being single means you don't need insurance. Just to have a funeral and be buried is expensive, so you should have coverage for that."