Top money tips for 2012
Now is the time to prepare your finances for 2012. The following top money tips for 2012 can help you start the new year on solid financial footing.
Don’t fly with investing trends
Certified financial planners like Robert Fragrasso of Fragasso Financial Advisors in Pittsburgh, Pa., advise consumers not to invest irrationally by becoming a slave to market trends.
“Trust the concept of a regression to the mean,” he says. “An investor should maintain discipline — total asset allocation discipline — and continue to invest discretionary money into their portfolios.”
Whenever discretionary funds are available, consider depositing them into an IRA, 401(k) or similar investment account. Stick to the plan and money will be there when you need it.
Negotiate free checking
Free checking isn’t as common as it once was, but that doesn’t mean consumers can’t fight for their right to low or no fees. If you are otherwise satisfied with your bank, consider negotiating with your banker over free checking. You may have to have direct deposit or sacrifice some features, but that may be worth the trouble.
Submit mortgage documents sooner, not later
Tardy mortgage documents can cause a home sale to fall through. This is particularly true with foreclosures and short sales. Thus, as mortgage banker Michael Becker of WCS Funding Group in Lutherville, Md., advises, file early and keep copies in case they’re needed later.
Use inactive credit cards a little
Frozen credit won’t boost your credit score, and it may lower it slightly. As such, make a small purchase every now and again, then pay the card off. It’s what your credit score deserves.
Think dividend income
Investors should focus on dividend income rather than capital growth, says financial planner Julie Casserly of Chicago’s JMC Wealth Management. Considering that dividend income has made up 42.54 percent of annualized total return on the S&P 500 since January 1926, it should pay to listen to history. Invest in companies that pay a dividend of more than 2 percent, which is the 10-year Treasury baseline. Consider diversity in your portfolio, too.
Watch the banking fees
Watch your monthly bank statements for new bank fees and pay attention to fee disclosure literature included with your statement. If you don’t have access to a fee disclosure, find it online or ask for one at your banking branch. Armed with knowledge, you can decide whether or not to move your money elsewhere.
Don’t refinance until you’ve done a credit sweep
A bad mortgage refinance rate can do huge financial damage. That’s why you’ll want to make sure your credit is as in order as possible before applying to refinance your home. Pay your bills, report any errors found on your credit report and don’t open any unnecessary lines of credit before the big re-fi.
Underwater? Work out a short sale
If you owe more on your home than it’s worth and you’re looking to sell, consider negotiating a short sale with your lender. The troubled real estate market has made more lenders amenable to the process.
Financial tips for 20-somethings
Financial Tips Advisory