Finance Pundit

Interest rates are at an all-time low, making this the perfect time to make some money moves. Here are five smart financial fixes you should act on now while the rates remain so low.

Financial Fix #1: Buy a Vehicle

If you currently need a new ride, now is a great time to purchase a new or “new-to-you” car. Automobile companies are currently offering some great incentives to tempt consumers into buying. Visit showrooms and look for a company offering car loans at no more than 3.5% interest.

You might be able to find the car of your dreams for an even lower rate if you have a good credit history. If you’d rather hold on to your current vehicle, try to refinance the remainder of your car loan at a reduced interest rate.

Financial Fix #2: Tackle Your Credit Card Debt

If you are paying high interest rates on your credit cards, it’s time to start paying off the debt. Interest rates will start increasing at some point and it would be better not to owe money on credit cards when they do.

Call your credit card companies and request lower interest rates. Take advantage of low-interest balance transfers. Then focus on paying off your remaining debt by tackling the credit card with the highest interest rate first.

Pay as much as you can every month on this card while still making the minimum monthly payments on the rest. Once this bill is paid off, start working on paying off the next highest card. Keep this pattern going until you are debt-free.

Financial Fix #3: Buy New Property

With fixed rate mortgage rates so low, now is a terrific time to buy a house or a rental property. First-time homebuyers can really score a great deal by combining first time homebuyer incentives with low mortgage rates and reduced housing prices. If you’re already a proud homeowner, consider buying rental property to bring in passive income.

Financial Fix #4: Refinance Your Home Loan

If you currently carry an adjustable rate mortgage, act now to refinance your home with a fixed rate mortgage. If you can get locked in at the current low interest rates, this will save you hundreds of dollars every month for the life of your home loan. Bear in mind that you will need to have good credit history and sufficient home equity to qualify for refinancing options.

Financial Fix #5: Consolidate Your Student Loans

Although the cost of going to college has risen sharply, the interest rate on student loans is currently fairly low. If you have two or more outstanding student loans, check with your loan provider on consolidating those to a fixed loan with a lower interest rate. This will lock you in to lower payments and give you a little breathing room in your monthly budget.

Keep in mind that once you consolidate your loans, you won’t be able to reverse the consolidation. This means you will no longer qualify for any forgiveness programs.

You’ll probably have to have a good credit history before making any of these financial fixes. Use an online comparison tool to find out the interest rates on various student loans, home loans and credit cards before making any drastic money decisions.

Everyone should keep a close eye on the monthly bill side by side with the income and practice the accounting skills every month. It is very important to track your finance on a regular basis so that you know your present financial situation.

Aside from the courage to discover your financial strengths and pitfalls, the ledger is your main tool in managing your checkbooks. You get a certain number of checks free of cost for a certain period. You will record how much balance you have and how much money can be disposed of from the budget through check. The ledger is also where cash machine withdrawals, any interest gained or any banking fee deducted per month are recorded.

Here are some tips for balancing that dreaded checkbook:

1. Do not throw away any receipts as it will help you in keeping a track of your expenses. It is almost impossible to remember all expenses that were done throughout the month. Receipts will keep you aware about the expenses done in a month.

2. Try to make the recording a daily habit. Record all the transactions on your account. This way you will prevent missing out any important figures in the list of your expenses.

3. Don’t trust the bank balance. Banks can sometimes delay in posting transactions and you might be fooled into making changes on your ledger or spending more. Clarify all the records on your ledger with your bank before you amend any changes in the transactions.

4. At the end of the month, compare your ledger with the bank statement. You will get to know how much you have earned in interests, the banking fees, ATM fees, additional transaction fees, or any bonuses earned. As soon as the check clears from the bank, mark it on the ledger so that you know that the item is paid.

5. Record all automatic deductions and direct deposits in your ledger. Bills that are paid automatically should be recorded on the day they are paid so that they are not overlooked later.

Stay on top of your finances as it shows out your personal responsibility. If you are not pro-active to check the records with your bank and keep your ledger updated, who will?