Financial Beat

By Yvonne Chilik Wollenberg

AUTOS

New safety features can save your neck

Smarter head restraints in some new cars are dramatically reducing neck injuries, says the Insurance Institute for Highway Safety. For example, Volvo's "whiplash injury prevention system," a redesigned seatback that drops back in rear-end crashes, has reduced neck injuries by 49 percent.

Other car makers have brought about a 43 percent reduction in injuries with new, "active" head restraints which push up toward the back of your head during a rear-end crash. They're available in the Buick LeSabre, Infiniti QX4 4X4, Infiniti Q45, Pontiac Bonneville, Saab 9-3 and Saab 9-5. Ford says it's improved the head restraints in Taurus and Mercury Sable models, with an 18 percent reduction in neck injuries. Toyota has redesigned the seatbacks in some models to allow your body to sink further back during a rear impact, but test results thus far show no decrease in neck injury claim rates for models with this system.

CREDIT CARDS

Pay attention, or pay more cash

If you don't manage your accounts closely, you're probably paying more than you have to in credit card charges, says Myvesta, a debt counseling organization. More than half of those responding to a survey of credit card practices don't negotiate or shop around for better interest rates. A quarter of respondents don't even review their credit card statements every month. Nearly half don't know what interest rate they're paying.

Unless you look at your credit accounts carefully, you could end up paying for items you didn't buy or missing billing errors or fraud. Watch your statements for any unexpected interest rate changes. Call your credit card companies to make sure you have the best terms and interest rates available.

TAXES

You might score twice when you refinance

If you've refinanced your mortgage, there are two scenarios by which you may be able to save more money at tax time, says the Internal Revenue Service. If you used part of refinanced mortgage money to pay for improvements in your home, you can deduct the points you paid to get the loan from your 2002 federal income taxes. Also, if you refinanced for a second time, you can deduct the points you paid for the first refinancing (no matter when it occurred). For details, read IRS Publication 936, "Home Mortgage Interest Deduction" at www.irs.gov.

In all other instances, points paid to refinance a home mortgage can only be deducted over the life of the loan. To determine how much interest you can deduct, divide the amount of money you paid in points by the total number of payments you'll make. For example, if you paid $2,000 in points and will make 360 payments over a 30-year mortgage, you could deduct $5.56 per monthly payment, or a total of $66.72 for the year. Other closing costs, such as appraisal fees, are generally not deductible.

MUTUAL FUNDS

We've lost your money, but we'll charge you more

The bear market has chewed up the profits in most fund portfolios, but management fees are still creeping upwards, says Lipper, a mutual fund information company. Management fees, which compensate the fund's manager, averaged 0.6 percent of average net assets in April, the latest data available. That's slightly higher than the 0.599 average in 2001 and the 2000 average of 0.581. The increase sounds small, but it has an impact on shareholders because the fee is deducted from the fund's returns before they go to the investor.

The average stock mutual fund lost 22.24 percent for the year, as of October 30.

The author is a freelance writer in Teaneck, NJ.

 

Yvonne Wollenberg. Financial Beat. Medical Economics 2002;24:8.