Biz Bits: 5 tips to improve your financial health in 2013

Tip of the Week

Creating better financial habits tops many New Year's resolution lists every year. If it is on your list for 2013, there are a few steps you could consider to help you pursue your goals.

According the Fall Merrill Edge Report, 77 percent of mass affluent Americans - those with $50,000 to $250,000 in investable assets - said they are going to track and manage their budget over the next six months. Another 65 percent said they are going to save for retirement and 61 percent said they are balancing their short- and long-term financial needs.

"When planning for the new year, it's more important than ever to think about your financial goals," says Dean Athanasia president of Preferred and Small Business Banking at Bank of America. "As Americans take on more complex financial responsibilities, we encourage them to gain more control over their financial future by setting goals, seeking counsel and saving earlier for retirement as well as their children's education."

While your strategy should be catered to your unique financial situation, here are five common tips to help you improve your financial health in 2013.

- Set your budget before you start spending: The most dangerous way to spend throughout the year is to swipe your credit card and wait until the end of the month to check the damage. Creating a budget before you spend is a great way to stay on track throughout the year. Once you have a full picture of where your money goes each month, you can find more places to save - perhaps you're dining out on the town more than you expect.

- Set a monthly meeting with your spouse: Regular discussions with your spouse about finances can lead to greater financial confidence, according the Merrill Edge Report. Sixty-nine percent of mass affluent couples are discussing their finances at least a few times per month, and 64 percent believe that these ongoing financial conversations will help them achieve their financial goals. In addition, couples say they discuss day-to-day purchases, such as groceries, nearly as much as they discuss large purchases, like a home or car. Getting into the routine can be the hardest part, but scheduling a monthly meeting is an easy way to begin.

- Raise your 401(k) contribution: Most major companies that offer 401(k) plans match a percentage of your contributions. Typically, these matches could range from 25 to 100 percent, up to 6 percent of your salary. Even if the match is at the low end, that's a great return on investment. Contributing another 2 to 3 percent of your paycheck to your retirement savings could help you pursue your goal of long-term financial stability.

- Create an emergency fund by setting an automatic deduction: Over the next six months, 47 percent of the mass affluent say they are creating an emergency fund, according to the Merrill Edge Report. You should work toward having three to six months of savings in an emergency account. That total is less daunting if you automatically deduct a contribution from your account each month. After a couple of months, most people begin to think of it as a bill they have to pay and in no time, you'll have fully funded your account.

- Open a college savings account: Eighty-four percent of mass affluent with young children are concerned about the rising cost of college, and half of all mass affluent parents (50 percent) wish they had started saving for their first child's education earlier. The best time to start saving is now, and talking with your savings provider about opening a college savings account is a great way to get that started.

- Brandpoint

BBB Watch

As the temperatures turn bitter, many people start planning their relaxing beach vacations. The Better Business Bureau advises consumers to be very careful about booking through travel agencies. The BBB reports that complaints are up for this 12-month period.

"When planning travel, it is easy to get caught up in the excitement of seeing a new place," said Steve J. Bernas, president & CEO of the Better Business Bureau serving Chicago and Northern Illinois. "Be sure to compare different travel agencies and find one that is reputable."

The Better Business Bureau offers these tips when booking with a travel agency:

- Compare services and do not feel pressured: Be very cautious about any operation that pressures you to make an immediate decision or if there is a statement that an offer is good "only if you act now." Compare the services, fees and travel costs from a number of travel agencies before selecting the most attractive package.

- Be cautious about telephone, letter or postcard solicitations: Be careful of travel solicitations claiming you've won a "free" trip, or can get "special discounts" on hotels and airfares.

- Pay with a credit card: You can get some protection when using a credit card to purchase travel services.  If you don't get what you paid for, contact the credit card company and attempt to get the charges cancelled.

- Get it in writing: Don't rely on oral promises from a travel service. Request copies of any brochures and contract before purchasing your trip package, or making any reservations.

- Consider investing in travel insurance: Travel insurance can provide protection in the event of an accident, an illness, lost luggage, or a cancelled or interrupted trip, among other things. Read the insurance contract to understand coverage and exclusions. Investigate trip cancellation policies and determine what they cover to see if they would be worthwhile to purchase the insurance.  

- Always check the business first: Check out the reputation of the travel agency before doing business with them. Check out free BBB Business Reviews for valuable information.

For more information, visit www.bbb.org.

The List

According to Forbes, the most diverse metro areas in the U.S. are:

1. San Jose, Calif.

2. New York City

3. Oakland, Calif.

4. Houston

5. Honolulu

6. Fort Lauderdale, Fla.

7. Orange County, Calif.

8. Memphis, Tenn.

9. San Francisco

10. Albuquerque, N.M.

Tech Talk

There's lots of news reports swirling around Research in Motionas we get closer to the launch of its completely overhauled BlackBerry 10 mobile operating system and the new phones which will run it. Reuters reports that the usual suspects will carry the new handsets - Verizon, AT&T and T-Mobile will all have versions of BB10 handsets at launch. But those two phones are only the beginning. In an interview at the Consumer Electronics Show (CES) in Las Vegas, RIM told Fierce Wireless that we should expect six new BlackBerry 10 devices this year. The rumor mill suggests that for the initial round there will be at least two new handsets - one with a keyboard on the front and the other a pure touchscreen model. – The Street

GateHouse News Service