I would like to share with you 3 news items that I found noteworthy in the past few months.
1. Free credit freezes started on September 21st
Starting September 21st, a new federal law came into effect. This new law regulates that we now can freeze and unfreeze credit files without paying fees. It is quite easily done on the credit bureaus’ websites. Second, parents get a free credit freeze for their children under age 16. Freezing our children’s credit is not something many of us think about, but it is clearly worthwhile because we might not notice it for years if our children’s ID has been stolen. Third, fraud alerts that tell businesses to check with you when you purchase on credit will now be extended to 12 months from 90 days. For more information, visit the consumer protection information of the Federal Trade Commission and the Bureau of Consumer Financial Protection.
2. The F.I.R.E. movement (Financial Independence, Retire Early)
It sounds extreme to save more than half of your salary in order to retire at age 40, but it also makes me ask: How did they do it? What can we learn from F.I.R.E.? I believe that the strategies and financial calculations of FIRE individuals and families can be useful when we think about retirement planning before and financial management during retirement. Examples are time value of money calculations and simple but proven strategies for weathering stock market fluctuations, such as keeping at least 6 months of expenses in cash. The New York Times summarized questions about the FIRE movement in an article.
3. Costs of college
I am starting a new research project this fall that investigates tools for undergraduate students to help these young adults make good financial decisions in college. The decision frame includes small decisions about day to day expenses and the big decisions about student loans. For this project, I have been collecting articles in the news media. I like a recent podcast of a journalist who spoke with her high school-aged son about college costs. The conversation makes an interesting turn when the son takes over the role of the interviewer. Listen to this podcast on the Boston College’s Center for Retirement Research website.