- The Washington Times - Friday, January 30, 2004

The cruelest month for consumers ends today. January is the month that all the holiday bills come due. It is also the month that the government mails out those helpful reminders that state and income-tax payments are due by April 15.

In January, many homeowners in the Washington area get their annual residential property assessment, an indicator of how much they will owe in property taxes later in the year.

Household energy bills in January typically rise as the weather turns colder.

Throw in the fourth-quarter 401(k) statements that are usually mailed in January — for many investors, those statements have been less than rosy in recent years — and it’s enough to make consumers want to steer clear of their mailbox until, well, Monday.

“In December, everyone is full of the holiday spirit. And then January comes and suddenly it’s not so ho-ho-ho anymore,” said Steve Rhode, a “private money coach” in Rockville and co-founder of Myvesta, a nonprofit consumer education group.

The January financial blahs in the Washington area usually begin early in the month, when Marylanders receive their residential property assessments. The District and Virginia jurisdictions mail their assessments later in the year.

Many Marylanders were shocked when they got this year’s assessments. In Montgomery County, for example, residential property assessments rose 55 percent, the second-highest in the state.

That doesn’t mean homeowners will actually see their property-tax rise by that much; the state puts a 10 percent yearly cap on taxable assessments.

Many homeowners in the Washington area received higher heating bills this month, because December was colder than usual.

The average household heating bill this winter is expected to rise 8 percent for homes heated by natural gas, 3 percent for homes heated by propane and 2 percent for homes heated by electricity, according to the federal Energy Information Administration.

The average bill for homes heated by oil will drop 4 percent this year, the agency predicts.

Holiday bills contribute more to the January financial blahs than anything else, Mr. Rhode said.

Christmas, summer vacations and back-to-school shopping form a “trifecta of debt” for many consumers, he said.

“The most amazing part about holiday bills is they come every year, and every year people are caught off guard by them,” Mr. Rhode pointed out.

Lorri Jones, a Welcome, Md., bookkeeper, said she almost cried when she received her credit-card bill this month.

Before the holidays, Ms. Jones planned to create a budget to ensure she spent the same amount of money on her two children, and even considered tracking her purchases on a computer spreadsheet.

She never got around to doing that and ended up overspending.

When her credit-card bill arrived this month, it listed the holiday purchases for her children, as well as a mid-December vacation to Hong Kong, a New Year’s Eve trip to Western Maryland and an upcoming trip to Charlotte, N.C., that Ms. Jones paid for in advance.

“I feel completely overwhelmed. I keep thinking this will get better, but I keep digging myself deeper into a hole,” she said.

Consumers like Ms. Jones should add up the total of their holiday bills in January and then start saving that amount for next year, Mr. Rhode said. He also advises clients that it is OK to pay the minimum balance on their credit card to give themselves breathing room while they catch up on other debts.

It is never a good idea to pay off a credit-card bill if you can’t afford it, he said. For example, some people are so bewildered by a high credit-card bill that they pay it off immediately, then find that they don’t have the money to pay other bills that month.

“If you find yourself in a hole, stop digging,” Mr. Rhode said.

Consumers also should consider transferring the balance on a high-interest credit card to a card with a lower interest rate, said Paul C. Bennett, a Reston financial adviser.

“Everyone’s mailbox is full of offers from credit-card companies wanting your business. Take advantage of that,” he said.

Consumers should read the fine print, though.

In some cases, if a consumer misses one payment after transferring their balance, the credit-card company can jack up the interest rate, he said.

Almost every consumer could benefit from professional advice to avoid financial blahs next January, Mr. Bennett said. Ideally, a financial planner could help a client pay off his debt within a few months and then create a financial “cushion” to help avoid overspending during the holidays.

Financial advisers tend to charge customers by the hour, as a percentage of the customer’s total assets or on a commission basis.

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