In this article: The latest way to save on phone bills

A s we head to the end of the year (never mind the millennium), it's time to start thinking about some of those Dec. 31 deadlines. Atop my list: contributing to New York's state-sponsored college saving plan for my kids. At press time, 20 states had such plans (see box at right), with a handful more set to come on line by 2000. (Check your state's status at 1-877-277-6496.)

How they typically work: Most plans, having joined forces with top management firms such as TIAA Cref or Fidelity, invest your money in a mix of stocks, bonds and mutual funds. Generally, your contributions are invested aggressively -- chiefly in stocks -- while your child is little. As the child grows, the mix shifts to more conservative (fixed-income) investments to lower the chances you'll lose more than you can tolerate in the years right before college.

The benefits are substantial. Money grows tax-deferred. When it's withdrawn, it's taxed at the child's rate. Some states even give you a tax deduction for money you put in. These plans have a leg up on the prepaid tuition plans states developed in past years: Money you sock away can be used for any education-related expense at any school in any state. If the child opts not to go to school, a sibling can use the money. And you can contribute considerably more than you can contribute to an education IRA.

Downside: You have little or no say in how your money is invested. Some plans are criticized for not being aggressive enough. I've yet to see one I believe is taking too much risk.

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The latest way to save on phone bills

You've probably gotten pretty good at haggling over your long-distance phone rates. Now, think about your "short long-distance" or "regional" calls. Long-distance carriers and the "Baby Bells" are now allowed to compete for this bit of your business.

That's good news, says telecommunications analyst Jeffrey Kagan, because it's driven down regional calling prices by 40% in the past few years. Unfortunately, it means more shopping around.

First, figure out which company now handles your regional calls. Chances are, it's your local phone company. Call customer service to find out what rate you pay and if it's the lowest available, then ask your long-distance carrier for a competing bid. AT&T, for example, will cut the monthly fee for its One Rate customers to $3.95 from $4.95 if they also cough up their regional business. If you're starting from scratch trying to get a better long-distance rate, taking a few minutes to factor these calls into your decision can save you more than a few dollars.