Change Your Financial Ways With the New Year

Keep in mind that the interest-free period on must last long enough to justify the typical transfer fee of 4 percent. For example, if you're transferring the balance of a 16 percent card but only get only three months of zero interest, this gets you nowhere. If you get a year interest-free, this saves you 12 percentage points of interest that year. But you shouldn't lose sight of the fact that, after the interest-free period, the rate on the new card will become painfully high. To arrange balance transfers, you must have sufficient credit, so protect your credit by making payments on time, if at all possible. Of course, balance transfers are just a means to an end; the ultimate solution is to pay off the card.

Reassess your mortgage interest rate. If you haven't done this in the past few years, you could be throwing away hundreds or even thousands every month on an unnecessarily high mortgage payment. It's not as if this money is going in the trash can. Actually, it's being scooped up by financial institutions that are getting lower interest rates in their own financial dealings — rates on which your mortgage is based.

So instead of enriching these institutions, enrich yourself with a lower rate. Historically low interest rates continue to prevail, providing a savings opportunity. From early November until mid-December, average rates on 30-year fixed mortgages declined from about 4.24 percent to about 4.18 percent.

Taking a hard look at these issues can be unpleasant, but the satisfaction you get from cutting costs and maximizing savings and investment can help you sleep well in 2012.

Ted Schwartz, a Certified Financial Planner®, is president and chief investment officer of Capstone Investment Financial Group. He advises individual investors and endowments, and serves as the advisor to CIFG Funds. Because Schwartz has a background in psychology and counseling, he brings insights into personal motivation when advising clients on achieving their wealth management goals. Schwartz holds a B.A. from Duke University and an M.A. from Oregon State University. He can be reached at

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