5 Things Consumers Should Know About Dangerous Products

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Buckyballs Magnet Complaint
CPSC via APSmall, high-powered magnets are one of the many recalls issued by the Consumer Product Safety Commission.
By Kimberly Palmer

Product recall announcements from the Consumer Product Safety Commission are often met with a mixed reaction: Some companies complain that the recalls are costly and not always necessary. Some companies decline to cooperate with recalls, insisting that their products are safe when used correctly. And some parents report feeling so overwhelmed with the constant barrage of recalls that they simply ignore them; this response is so common that it spawned the term "recall fatigue."

In a recent speech to the American Council on Consumer Interests, Inez Tenenbaum, chairman of the CPSC until last year, noted that the commission has expanded greatly in the past five years, increasing from 175 employees to 500, and made it easier to search for products with the launch of the website saferproducts.gov. The commission also opened a product testing facility in Rockville, Maryland, and the first foreign office in Beijing to look at products headed toward U.S. consumers.

A recent slew of high-profile announcements from the commission within the last several weeks, including a recent recall of bean bag chairs and warnings about the risks of small, strong magnets, renews the debate about the role of the safety commission, and how parents can best use the information it provides to protect their families. Here are five safety facts consumers should consider before ignoring the next round of recall announcements:

1. Many recalls originate from a parent complaint or reported injury.

The first sign of a potential danger is not usually from the government announcements, but from rumblings of parental concerns on advocacy websites or even blogs. In fact, the safety commission is often tipped off to potential problems from consumers themselves; the website cpsc.gov offers an easy way to lodge complaints and concerns. (Just click the "report an unsafe product" button in the top left corner.)

2. Companies sometimes fight recalls at first, but that doesn't mean the products are safe.

While companies often cooperate with CPSC in the wake of a recall and offer consumers an easy fix to make their products safer, they don't always. One of the most controversial recalls in recent years involved the powerful magnets called Buckyballs. When ingested by children, those magnets can wreak havoc on organs, resulting in hospitalization and even death. The company behind those magnets fought back, saying that the balls are not intended to be played with by children. The company has since gone out of business. But as recently as last month, CPSC announced a recall of another type of high-powered magnet, Magnicubes.

3. Just because products have been around for a long time doesn't mean they're safe.

In June, a post on the website flashbak.com titled, "8 Reasons Children of the 1970s Should All Be Dead," went viral, and the accompanying pictures made it easy to see why: Today's 40-somethings grew up largely without mandatory five-point harness car seats, SPF 50 sunscreen and the advanced bike helmets kids use today.

However, over the past five years, the CPSC has recalled a slew of items that parents have used for years, including drop-side cribs (because of the entrapment hazard), certain types of baby slings (because of the suffocation hazard) and those bean bags (again, because of a suffocation hazard). Certain types of strollers have also made the list, which is why it's important for new parents to check recalls.gov before making secondhand purchases. (Recall items are prohibited from being resold.)

4. It's not just about children's safety.

Many recalls issued by the CPSC also affect adults. One recent recall involved computer power cords that can overheat and potentially cause a fire, and another involved an adult bicycle that can crack, leading to an increased risk of falling. The commission's mission is focused on consumer safety, not just child safety, although many of the recalled products involve keeping children safe.

5. Staying on top of recalls is easy and getting easier.

In addition to looking up recalls at recalls.gov or cpsc.gov, where you can also sign up to receive alerts over email, the General Services Administration offers an app called Recalls​ for Android that includes announcements from CPSC, National Highway Traffic Safety Administration, Food and Drug Administration and Department of Agriculture. Websites like SafetyMom.com offer parents other options for tracking the latest developments in the field. Consumers should also register new products after they purchase them to get alerts if the product ends up being recalled.

Organizations like CPSC can be consumers' friend when it comes to avoiding dangerous products -- but you have to resist giving in to "recall fatigue," because you never know when an announcement will affect you.

Kimberly Palmer is a senior editor for U.S. News Money. She is the author of the new book, "The Economy of You." You can follow her on Twitter @alphaconsumer, circle her on Google Plus or email her at kpalmer@usnews.com.

10 Financial Rules You Should Break
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5 Things Consumers Should Know About Dangerous Products

This is the granddaddy of them all. Start to type "emergency" into Google (GOOG), and the first suggestion is "emergency fund." The rule is to make sure you have six month's of living expenses tucked away in cash in case you losefyour job or suffer a financial setback. Of course it's important to have a financial safety net, but when you earn virtually nothing on your cash, this rule can cost you. For example, if six months of living expenses for you is $25,000, you'd be sacrificing close to $1,000 of income a year by keeping this money in a checking or money market account.

For years, I've broken the mold on this financial rule by telling clients they shouldn't have their emergency fund in cash. Instead, choose a short-term bond fund that pays 3 percent or higher for your safety net. If you need the money quickly, you can easily sell the fund and get access to the cash. If you don't need the cash –- and these emergency fund accounts are rarely used –- you can still make money on the assets.

Not so fast. There are many good reasons to contribute to a 401(k), such as tax savings, tax-deferred growth and a possible employer match, but there are also good reasons not to contribute as well. Don't blindly dump money into your 401(k) if you don't have an emergency reserve of some sort and there is a chance you will be laid off. It is taking longer for most to find a job, so if you think you may be out of work, make sure you have the resources to pay rent and buy food until you land a new job. 

​Also, if your employer doesn't provide a match and you are in a low-income tax bracket, it may make more sense to pay the tax now (since you are in a low tax bracket) and invest in a Roth individual retirement account instead. Use this 401(k) vs. Roth IRA calculator to crunch the numbers.

You cannot cut your way to wealth. Too many people and financial advisers focus on trimming expenses when they should be focused on the other half of the equation -- income. I'm a proponent for living within one's means, but too often that creates an artificial barrier or ceiling. "This is what I make, so I have to cut back to save more," is often the thought process. Rather than living within your mean, work on increasing your means.

There are many ways you can make more money, including asking for a raise, boosting your skills –- your human capital –- and getting a promotion, starting a side project in the after-hours or going back to school and starting a new career. What you make today is not necessarily what you can make tomorrow. Cut unnecessary expenses and then use your energy to increase your income.

You should only save for your children's education if you can afford it. That means when you're on track to having enough assets for your retirement. Assuming you have the retirement assets and now want to save for college, most advisers will recommend a 529 college savings account.

Not so fast. These 529 accounts have some real advantages, such as tax-free growth of contributions if they are used for approved higher education expenses. This tax-free growth is a big benefit. However, if you withdraw money from this account and do not use it for approved higher education expenses, the gains will be subject to ordinary income tax and a 10 percent penalty.

The big risk is if you fully fund your child's college education but he or she decides to not go to college, drops out, finishes early or goes to a less expensive school. You have the ability change the beneficiary to another qualifying family member without penalty, but if you have just one child, there may not be anyone you can transfer the funds to. You would then have to liquidate the account and pay the tax and penalty. If you are undeterred and still want to pay for your child's college education, start with a small contribution into the 529 and fund up to a maximum of 60 percent of the cost in case one of the above scenarios occur.

The average age of cars on U.S. roads is 11.4 years. So if you're average, then it may make sense for you to buy a car -– especially a car a year or two old –- instead of leasing. However, if you do not intend on driving the same car for over a decade, a lease may be a much better option. A new study by swapalease.com found it was better to lease than buy based on its criteria. And under certain circumstances, you may be afforded a larger business deduction with a lease compared to a purchase.

The certified financial planner designation is the gold standard when it comes to financial planning. I wouldn't think of hiring a financial planner if they weren't a CFP practitioner. However, just because you are working with a CFP doesn't mean you shouldn't research your adviser, his or her areas of expertise and how he or she charges. The CFP tells you he or she has advanced training in areas related to tax, investing and retirement planning; has passed a comprehensive and difficult exam; and has agreed to adhere to a high code of ethics.

The onus is on you to know what you need and to make sure your CFP financial planner can deliver. Don't get lulled into thinking that just because he or she have three letters after his or her name that he or she has been screened. Ask tough questions before you trust your money to anyone -– even a CFP.

Most financial pundits will advise taxpayers to have just enough taken out of their paycheck so when April 15 comes around, they will neither owe money nor receive a refund. The rationale is if you get a refund from the Internal Revenue Service, it means you paid too much in over the year -- and the government has had use of your money without paying you any interest. Keep the money and invest it yourself is the theory.

'Again, that's the theory, but reality is much different. It all comes down to psychology. I look at paying a bit more to the IRS as a forced and automatic savings account. Sure you won't earn interest, but human nature tells us you probably won't save the money anyway. There is a greater chance you will squander $100 a paycheck then if you receive a $2,400 check from the IRS. One approach takes a plan and discipline each month to save and invest while the other doesn't. A check from the IRS isn't an interest-free loan; it is an automatic savings plan.

Nobody wants to endure an IRS audit, but too often I see honest and ethical taxpayers avoid claiming certain deductions or taking certain positions that are completely legitimate because they fear it will increase their chances of an audit. First, your chances of being audited are small –- about 1 in 104 chance. If your return doesn't include income from a business, rental real estate or farm, or employee business expense deductions, your chances are even smaller -– 1 in 250. Second, if you and your tax preparer are not crossing the line, you have little to worry about. In fact, thousands of taxpayers get a check from the IRS at the end of the audit. Don't let a small chance of an audit keep you from taking advantage of every tax strategy for which you qualify.

Do what you love, and you'll never have to work a day in your life, or so the saying goes. It sounds good and feels good, but it's not necessarily true. Sometimes –- often, actually –- doing what you love can be a great hobby but not a good career. There are a lot of things I enjoy that I'll never make a dime doing. A better approach is to find something you enjoy, are good at and that you can get paid to That is the financial trinity you should aspire to find because it ties your interests with your skills with the marketplace

Follow this rule, and I'll send you straight to detention. We know college costs are soaring, and we don't want to bury our kids in college debt, so most parents prioritize college saving over retirement saving. Big mistake. If worse comes to worst, Junior can get a loan, work while in school or go to a less expensive school. Basically, Junior has decent options, and you have tough choices. 

​If you haven't saved enough for retirement, you are stuck. There's very little you can do other than slash your expenses, work longer or both. Save for your own retirement first. That's the financial rule you should follow. If you have amassed so much wealth when your children head off to college that you can afford to help them, go for it. If you haven't, you'd be doing your kids a disservice by jeopardizing your own retirement by paying for their tuition.

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