This annual New Year’s column suggests steps readers can take to make the right money tips in the coming year. Here’s hoping you have a safe and prosperous New Year.

Seek professional help.

Working with a financial planner can help you identify your life goals and a roadmap to reach them. A comprehensive financial plan takes a holistic look at your income and assets, and relates it to these goals.

The Certified Financial Planner Board of Standards Inc. has a wealth of consumer-friendly information, including the publication “How to choose a financial planner.”

Bankrate’s “Financial planners: Not just for millionaires anymore” gives additional financial planning and money tips.

Rebalance your portfolio.

The stock market, as measured by the S&P 500 Index, is up 25 percent for the year. That’s compared with a loss of 37 percent in 2008. While it’s true that the market would have to rise by 59 percent to recoup last year’s loss, there’s been enough upward momentum to suggest that you review your portfolio and determine whether you need to reallocate assets to bring your investments back in line with your risk tolerance and investment planning horizon.

Go international.

The dollar is the focus on one of Bankrate’s money tips because it likely will face some tough times in 2010. Getting some exposure to other currencies and economies can provide diversification against a potentially weaker dollar.

Whether it’s by buying a FDIC-insured, foreign currency-denominated CDs at EverBank or investing in an emerging-market equity mutual fund, you should consider diversifying your portfolio internationally.

For most investors, this isn’t a do-it-yourself project and they would benefit from working with a financial planner to decide on the best approach to adding international investments to their portfolio.

Lose interest in spending.

Paying the credit card company 11.5 percent to 13.5 percent on credit balances has your hard-earned money paying interest instead of buying things you need. Make 2010 the year you get credit under control by paying down card balances.

Don’t call it a budget, call it a spending plan. Figure out how you’re going to spend your income. Try Bankrate’s “Home Budget Calculator” or test-drive the free personal finance software at

List your assets.

Consolidate your financial information — insurance policies, retirement accounts and bank and brokerage accounts — in one location. Whether it’s a low-tech tool like a notebook with account and policy listings or a Web-based solution like, let family members grieve instead of being aggrieved in chasing down a loved one’s assets.

The Federal Citizen Information Center’s publication “Consumer Focus: Managing Household Records” explains what to keep records, where to keep them and when you don’t need them anymore.

Manage your credit history.

The consumer reporting agencies have to give you one free credit report each year. Spread the requests out over the year so you’re reviewing a credit report every four months. You could request Experian’s report in January, Equifax’s in May and TransUnion’s in September.

The FTC’s Free Reports Web page has a link to the site where you can request your credit report.

Dispute any incorrect information on your credit report and consider freezing your credit reports to protect against identity theft.

Chase yield.

Short-term interest rates can’t get much lower. Look at the interest you’re earning on your checking and savings accounts and see if you can do better.

With savings and checking accounts, there’s always a trade-off between convenience, liquidity, safety and yield. Chase yield by concentrating on balances not needed for short-term transactions or liquidity.

Extending the maturity dates on your savings from short-term into slightly longer 1- to 3-year maturities can improve your returns without locking into a long-term rate and regretting it. No one likes being “long and wrong,” or locked into a long-term CD only to watch interest rates head higher.

Convert to a Roth IRA.

The IRS has removed the income limitations for Roth IRA conversions, starting in the 2010. Work with your tax professional to determine if converting your traditional IRAs to Roth IRAs makes sense. The year 2010 marks a unique opportunity for conversion because you can choose to spread the taxes due on conversion over 2011 and 2012. The Bankrate feature “7 steps to a 2010 Roth IRA conversion” goes over this approach, but the IRS has the final word.

Fund your retirement account early.

If you’re like many consumers, you wait until the last minute to fund your IRA. Waiting until April 15, 2011, to fund your 2010 IRA contributions has you potentially losing up to one and a quarter years’ worth of interest. If you count on a tax refund to finance your retirement savings, you may be over-withholding on your taxes. Put that money to work for you sooner rather than later.

An automatic investment plan spreads contributions evenly across the year. That has you dollar-cost averaging your investment over the year. Don’t forget about catch-up contributions available if you’re over age 50.

Keep an eye on fees and expenses.

Especially important when investing retirement funds, you need to keep an eye on annual fees and expenses in the accounts where you invest. High fees are a drag on yield. Annual account fees when investing in mutual funds can also add up. When starting to build your investments, look to concentrate your investments in one or two diversified mutual funds within a mutual fund family rather than buying a lot of concentrated funds and paying multiple account fees.

<< Read all 2010 money tips

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

Bankrate’s content, including the guidance of its advice-and-expert columns and this Web site, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this Web site is governed by Bankrate’s Terms of Use.

Read more Dr. Don columns for additional personal finance advice. To ask a question of Dr. Don, go to the “Ask the Experts” page and select one of these topics: “Financing a home,” “Saving & Investing” or “Money.”

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