Here are three of the week's top pieces of financial advice, gathered from around the web:
Kick-starting an emergency fund
It's time to start building that emergency savings fund, said Suzanne Woolley at Bloomberg. Having six to nine months' worth of cash in a contingency fund provides an important buffer against a long list of possible emergencies. First, set up an account where you can't easily get at the money. Use automatic paycheck deductions or account transfers for a set amount of money each month. Or set small goals, like a "dollar per week of the year approach; in week 1, you save $1; in week 13, you save $13; and so on." Contributing to a Roth IRA is also smart. "You can save for retirement but also use it without penalty in case of emergency."
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Upgrades to save on heating bills
Cheaper fuel prices and warmer weather should mean smaller heating bills this year, said Ann Carrns at The New York Times. But no one wants to pay more than necessary or "wake up to a cold house on a frigid morning because the furnace failed." Heating system tune-ups generally cost $50 to $100, far less expensive than emergency repairs. It may also be time to upgrade to a newer, more efficient furnace, which can save money over the long term. Heating systems installed before 1975 are typically 60 percent efficient. Newer systems range from 85 to 95 percent efficiency. The Environmental Protection Agency estimates homeowners can save more than $115 on their annual energy bills by upgrading to high-efficiency heating and cooling equipment.
What would Warren Buffett do?
"Can you pick the guys who pick the guys who pick the best stocks?" asked Jason Zweig at Wall Street Journal. Some mutual funds and exchange-traded funds try to mimic leading investors, like Berkshire Hathaway's Warren Buffett or activist hedge fund manager William Ackman. But "imitating great money managers can be risky." The Global X Guru Index, which tracks several prominent hedge funds, handily beat the market by returning an average of 21.2 percent annually over the past three years. But Guru lost 11.7 percent in the third quarter of 2015, as its gurus' bets on drug companies like Horizon Pharma and Depomed took a beating, as did any fund that followed Ackman's bet on the embattled Valeant Pharmaceuticals. Don't forget: What looks like greatness can also be luck. "Leaning on someone else's smarts doesn't exempt you from the responsibility of doing your own thinking."
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