100 smart money tips for 2010
Greg McBride
10 smart money-saving tips for 2010

As for the tax bill that results when converting a traditional IRA to a Roth IRA, it is vitally important to pay the taxes out of other assets, not your retirement assets. Save that money for your retirement.

Tip 9Refinance into a fixed-rate mortgage.

Interest rates are at record lows, and eventually they will move higher, much higher. When that happens, the home financing place not to be is in an adjustable-rate mortgage that is subject to a rate reset.

Fortunately, this is entirely avoidable. Refinance out of an adjustable-rate mortgage and lock in a fixed rate while they are near record lows. Do this even if your adjustable rate mortgage won't reset for another year. Yes, you may trade away another year at 3.5 percent to 4 percent, but you permanently insulate yourself from the inevitable scenario of higher interest rates.

Homeowners who are upside down and can refinance through the Home Affordable Refinancing Program, or HARP, should move quickly to refinance as that program is scheduled to expire in June 2010.

Check out Bankrate.com's free search engine to find the lowest fixed mortgage rates in your area.

Tip 10Rebalance your investments.

Many investments have rebounded from their depths in March 2009, with the stock market up by more than 60 percent. Commodities, too, particularly gold and energy, have turned in strong performances. In other words, your portfolio may look much different than it did during the March lows. Such outsized performance by some asset classes can distort your asset allocation widely from its intended target. So rebalancing your investments back in line with your goals and risk tolerance is prudent. This also helps reduce the susceptibility of your portfolio to sharp market corrections.

Rebalancing is a good habit to undertake, but it is particularly important following a year of huge swings as we've seen in 2009.

<< Read all 2010 money tips

Read tips from previous years: 2005  |  2006  |  2007  |  2008  |  2009  | 

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