Open the envelope!

Terry Savage, Tribune Content Agency on

Some bad news is coming in the mail. Be prepared to face up to it immediately. Open the envelopes — the credit card bills and the brokerage statements. The card balances likely total more than you expected. And the brokerage or mutual fund statements likely show less than you hoped.

Here’s what to do about both of these issues. And some advice on managing your spending in the New Year.

All that holiday shopping you did, including the easy purchases done through PayPal and online shopping links, will suddenly show up on your January bill. For some it will come as a surprise.

Here are a few ideas to help you deal with that debt.

First, add it all up. Make a list of your card balances, the minimum monthly payment on each — and the interest rate charged. says the average monthly rate is 19.5%— but you can be sure those rates will increase. Many people are already paying 29%, since the card issuers know they have you trapped.

The simple formula to pay down that debt is to take the current monthly minimum payment and double it. Write that amount down and pay the same amount every month (not double the next month’s minimum). If you don’t charge another penny on the card, you’ll wipe out your balance in less than three years. But if you keep paying only minimum, it could take decades, and you’ll pay interest that totals five times the amount of your original purchase.

You can’t hide from this debt forever, but you can give yourself some time to attack it. Go to and look for balance transfer cards that can give you some breathing room with zero interest. But use that grace period to pay down the balance, or you’ll be in worse trouble. After six months or a year, the low or zero rate will jump dramatically.

We had a bear market last year — even if you didn’t look. The S&P 500 stock index was down nearly 20%, while the more-watched Dow Jones Industrial Average was “only” down 10%. And many widely held tech stocks closed the year with losses of more than 50%.

Now is the time to take a closer look at your portfolio. If you’re still working and have many years ahead of you to both make more contributions at these lower prices, then don’t panic. Your 401(k) or IRA will bring you out ahead over the long run. Still, you should know where you stand. The best way to recoup those losses is to contribute more at today’s lower prices.


Parents and grandparents with 529 accounts should also check balances in their college savings plans. It’s fine to invest aggressively when a baby is born. But as you get to be a year or two from needing the money to pay for college, you should switch to funds that are far more conservative. Review 529 plan investments and make necessary changes now, since you can only change once a year.

Retirees need to carefully keep track of their year-end retirement account values — especially if they have several different IRAs. If you’re subject to required minimum distributions, you must add up the total year-end value of all retirement accounts (though you can take distributions from only one or two of them). Use an online IRA RMD calculator to input the total account value and your age. With a click it will calculate your annual RMD, which you can take monthly or quarterly, or in one lump sum in the year ahead. Be sure to have taxes withheld.

There is no longer any excuse for not knowing where all your money went or for paying late fees on bills. There are several great apps that will help you track your income and spending, remind you when bills are due, and divert some money to a savings plan. Apps like Rocket Money, Simplifi by Quicken, Mint, YNAB (stands for You Need A Budget) and Acorns can help you get your finances on track.

It’s the New Year, and now you get a fresh start to reach your financial goals. But if you don’t figure out where you stand now, there’s no way you’ll reach those goals. And that’s The Savage Truth.


(Terry Savage is a registered investment adviser and the author of four best-selling books, including “The Savage Truth on Money.” Terry responds to questions on her blog at

©2023 Terry Savage. Distributed by Tribune Content Agency, LLC.




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