5 Money Moves to Make This Year

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moneymovesIn light of the vast fluctuations in financial markets over the past several years, you may just be tempted to stick all your money under the mattress and avoid the costly roller coaster Americans have been riding. However, the reality is there are several sound financial moves you can make this year to help weather the madness in relative financial peace. If you’re curious what they are, read on.

1. Save More for Retirement
Saving for retirement is generally a great idea, but especially so in such an uncertain economic climate. If you’re currently participating in a 401K program, consider bumping up your contributions to the limit, especially if your employer matches funds – it’s free money, so if you’re in a position to take it, don’t hesitate.

2. Truly Diversify Your Portfolio
You might think your portfolio is diversified, but a closer look may reveal it could be improved. If you have holdings in stocks, bonds, cash, and international investments, check to see if you’re diversified within each of those categories. If you only have a few stocks, for example, you may be opening yourself up to increased risk. Take a good hard look at your portfolio or have it reviewed by a specialist to see if your level of diversification can be improved.

3. Refinance Your Mortgage
Mortgage rates are still near historic lows, but they may not be there much longer. To take advantage of a mortgage refinance, act quickly. Average rates for a 30-year fixed mortgage have creeped up to around 4%, and experts predict they’re going to continue rising. If you’re currently paying more than that, now may be the time to pull the trigger and refinance.

4. Get Rid of Credit Card Debt
Carrying excessive credit card debt puts a serious strain on your personal finances. Get yourself on a strict budget and commit to spending less money than you make. Shop in bulk at warehouse retailers and eliminate those unnecessary convenience store purchases like sodas, snacks, and lottery tickets, and get your news online instead of buying a paper. These so-called minor purchases really add up over the course of a year.

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5. Spring Clean Your Finances
Look closely at all your monthly bills and identify ways you can save. Cut back on your TV channel package and paid movie services and switch to a cheaper plan for your cell phone. Sometimes, simply telling your provider’s retention department you can no longer afford its services results in a discount. Also review all your insurance policies: life, auto, health, and property. Make sure all your information is up-to-date and look into raising those deductibles to lower your monthly premiums.

Final Thoughts
No one is going to manage your finances for you. Take some time to do the necessary research and you can position yourself for a solid financial future, no matter the economic uncertainty swirling around you. By protecting your assets and adequately preparing for the future, you can get yourself on a path to financial freedom starting today.

What other moves can you think of to make this year?

David Bakke is a contributor for MoneyCrashers.com and writes about real estate, mortgages, money saving tips, and home improvement.